Petition — Cohen v. Equifax Services, Inc.

Supreme Court brief1981

Ask Donna

What actually matters in this document.

Text

Supreme Court, U. S.

FILED

NO. 80-

sa DEC 5 1980

? IN Ts 4

SUPREME COURT OF THE UNITED EA GROOM JR, CLERK |

OCTOBER TERM, 1980

RICHARD S. COHEN, ATTORNEY GENERAL,

STATE OF MAINE,

Petitioner,

EQUIFAX SERVICES, INC.,

FRANK W. ROBINSON AND PAUL D. WEEKS,

Respondents

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME JUDICIAL COURT

OF THE STATE OF MAINE

RICHARD S. COHEN

ATTORNEY GENERAL,

STATE OF MAINE

WILLIAM J. KELLEHER

ASSISTANT ATTORNEY GENERAL

PETER B. BICKERMAN

ASSISTANT ATTORNEY GENERAL

DEPT. OF THE ATTORNEY GENERAL

STATE HOUSE

AUGUSTA, MAINE 04333

(207) 289-3661

Counsel for Petitioner

QUESTIONS PRESENTED

1) Does 10 M.R.S.A. § 1314(1), which prohibits the prepara-

tion of an investigative consumer report without the written

authorization of the consumer who is the subject of the

report, violate the First Amendment to the United States

Constitution, as applied to the States through the Four-

teenth Amendment?

2) Does i0 M.R.S.A. § 1321, which restricts the reporting of

certain categories of personal information by consumer re-

porting agencies, such as information relating to a consum-

er’s race, religion, ethnic origin, and political affiliation,

violate the First Amendment to the United States Constitu-

tion, as applied to the States through the Fourteenth

Amendment?

PARTIES

The names of all parties to this proceeding are contained in

the caption.

iii

INDEX

Page

SURE EPEC FUR RIIIEN FB EOED ssiscvscsccdadsscncustnsanocinnevnasasett i

NPA saigharsnclinischedinsesctesupiess »cebsssbiaasearses canine i

IEE inervck inisenvs scsivuy testucakesitnisteublaghddiahin Gene sta iv-Vi

Ly TOY es ckisskccsnavaceradheivesscupiiipaantoonaiaeeiesn l

PAIN sits iconinnsctodassivigsnsinaibalionmpanaliteneatnus 2

CONSTITUTIONAL PROVISIONS AND

RRs 5 Ee Vee T MOR aitnciccrnnsevsssunetainstvepeasotisvette 2

SEP URAEINE CIF EERE CARE oi... cnccyecseccssncsrsphonssvascooesa 5

REASONS FOR GRANTING THE WRIT................. 8

I. The Maine Supreme Judicial Court Erro-

neously Equated Consumer Reporting With

Advertising in Terms of First Amendment

PINE saisiciitcgsvcciteonthstakerenauttinienaeaiaiess 8

II. The Decision of the Maine Supreme Judi-

cial Court Reflects an Erroneous View of

the State’s Interest in Protecting Personal

PRON ci scsicncisceitscierinvouistianiteagaaemenauaes 11

III. The Ability of the State and Federal Gov-

ernments to Regulate Consumer Report-

ing in a Manner Consistent with the

Evolving Commercial Speech Doctrine

Represents an Important Question of

FG RI hn sccsiteesacssatentectaiarssabageuliacinne 14

SG ARID sigtlivchskbsnevessntesapeeeticennenenegeninaiaaimaeaanle 18

MRE TEIE OX sinsscsatensnthiceceves stinéguprediysnlaaieatseciaiaaenal Ai-A51

IIE TNcajivdsicosacionrnsisisceghnicetsseniedpiniacioniaiianael B1-B20

IIE Shee ixisoes}orsccoiinbbhensiciabsasniiauédaessansabantiaieaniainiane C1-Cl9

Pe TRING Wl vidinciesonsscesssvacedecesthlipupsuienicaiamnaieaanaan D1-D2

PREVIOUS PAGE WAS BLANK |

AUTHORITIES

CASES: | Pages

American Future Systems, Inc. v. Pennsylvania

State University, 618 F. 2d 252 (3d Cir. 1980).......... 13

Bigelow v. Virginia, 421 U.S. 809 (1975)............... ielliineas 9,16

Breard v. Alexandria, 341 U.S. 622 (1951)..........ccceeeeeeees 11

Carey v. Brown, — U.S. —, 100 S. Ct. 2286, 65

a a MR RIED Si biinahonskivcthitnidntdanespebecoenassaneses 11,12

Central Hudson Gas & Electric Corporation v.

Public Service Commission of New York,

— U.S. —, 100 S. Ct. 2343, 65 L. Ed. 2d

BNO DR hisths Soilaanbed th chtincieenedptncmncsnlininidgses 8,9,11,12,14

Federal Communications Commission v. Pacifica

Foundation, 438 U.S. 726 (1978).........cccccccssssssseseeees 14

Friedman v. Rogers, 440 U.S. 1 (1979).......cccceesesesseeeeeeeees 8

Grove v. Dun & Bradstreet, Inc., 438 F. 2d 433

(3d Cir. 1971), cert. denied, 404 U.S. 898 (1972)....... 10,16

Hood v. Dun & Bradstreet, Inc., 486 F. 2d 25

(Sth Cir. 1973), cert. denied, 415 U.S. 985 (1974)...... 10,16

Kansas Electric Supply Company v. Dun & Brad-

street, Inc., 448 F. 2d 647 (10th Cir. 1971)............... 16

Katz v. United States, 389 U.S. 347 (1967) ...........cccceeeees 12

Millstone v. O'Hanlon Reports, Inc., 528 F. 2d 829

Ca: CU ciuidvodins tithenssite titers atenbaciaaemilbiaiesnias sing 15,16

New York Times v. Sullivan, 376 U.S. 254 (1964)............. 16

Oberman v. Dun & Bradstreet, Inc., 460 F. 2d 1381

FFU ee ag ET ia sundaes ainbsi Sc epic apichannaeiedadaacarwdadabnon’ 16

Ohralik v. Ohio State Bar Association,

Ee re ET Ce Te ornisnansontusastanphevedinelbeiaatiah 8,10,11,14,17

Red Lion Broadcasting Co. v. Federal Communi-

cations Commission, 395 U.S. 367 (1969)....... saiebubi 10

Retail Credit Company v. Russell, 234 Ga. 765, 218

ae BT cetclibiveningoilidvsasineuedindiannasiesvelvepbnans 16

Roemer v. Retail Credit Company, 44 Cal. App.

PO FA, TEP COT, Tee TEC Tass cscccscaiseisicenececsnes 13,14,16

Thornton v. Equifax, 619 F. 2d 700 (8th Cir. 1980),

cert. denied, 49 U.S.L.W. 3266 (1980)................0c000 16

Virginia Board of Pharmacy v. Virginia Citizens

CRITE ad GF es FO CRO os vacediesidcccssnccintysoscinees xen 14,16

Wortham v. Dun & Bradstreet, Inc., 399 F. Supp.

633 (S.D. Texas 1975), affd., 537 F. 2d

Ee SI Rls SE vcs Danny tiidestaninibinkindscessstnnansissvesess 16

Young v. American Mini Theatres, Inc.,

EF ra NE hart inahinncsctbgk bis idintesennsntlassabenks 14

STATUTES AND CONSTITUTIONAL

PROVISIONS:

United States Constitution, Amendment I................ 2,7,8,10,14

United States Constitution, Amendment XIV................. 7

Pt | Ee a a 15

RNIN Tat, MME. BPN nichia chs canerindevarconntabecsesinsens 15

Connecticut Gen. Stat. Ann. § 36-43 1..........cceeeeeeeeeeeees 15

NN RMN iis co cnsnsanstnsacbcdonsedvesesnaseene 15

Sy FUT tN BE POD cncnecnssscneascansesivecsdgnosessenss 15

EOP POMEINS TRY, TURE, FAR. GE TSE onc. ccescincscsisscciscceiecsssece 5

10 Maine Rev. Stat. Ann. § 1312(3).............cccccccccosscseees 6

10 Maine Rev. Stat. Ann. § 131207) ...........cccccccseseseeeeeees 6

BO ERIN TEP. BONE. BGS LOIS wccciisisicconcccveivassessssrecees 2,7,8,14

10 Maine Rev. Stat. Ann. § 1314(1)............... 6,7,11,12,13,14,15

10 Maine Rev. Stat. Ann. § 1314(1)(B) .............cceceeeeeeees 6

10 Maine Rev. Stat.

Maryland Comm. Law Code Ann. § 14-1201

Massachusetts Gen.

Montana Rev. Codes Ann. § 18-501

Nevada Rev. Stat. §

New Hampshire Rev. Stat. Ann. § 359-B: |

New Mexico Stat. Ann. § 56-3-1

New York Gen. Bus. Law § 380-c(a)

Oklahoma Stat. Ann. tit. 24,§ 81

Public Laws of Maine, 1977, c. 514

15 U.S.C.§ 1681

15 U.S.C. § 1681c

28 U.S.C. § 1257(3)

MISCELLANEOUS:

IE TRE sennccetniccettetnitinies 2,6,7,8,11,13,14

Pte RID vcitccctninsciancsncdngerniaiea 6,7

FP DTA wincntciepcrinnnesicinineni 6

PORT FFE i i eenctnciciocsinintnesies 6

Ee RUE thea iicetsieiadlitisnctllinstuinseniie 7

FS Deere 7

ae eT eaticnnnnactnsmcchienmiece 6,7

FP ED vce vesitineseictnuiseines 7

PE Ce re cites cntincceinistean 7

ceiabieseaeaaie 15

RAO GR. ©, DOB Dil. cenisicinsctntncns 15

sriceliabicacaevciidienesaiiaipitae 15

PT tetnischicbacsiosibinptcdinsitsnhiniabesie 15

iiiibiandlonsistalghe 15

shitiilihveniiensusievsticiehivietabcaaioel 15

SERINE FOF I. consccihscnsessssneceunsecsbinsesoesesos 15

sicliaiietneasbiinndamanhaniuaddas 15

asinlalieieiiuniaiiaamanieiaiee 5

Aiinonneahaiesetinatesiin vadaisisbobeaidgibantlciaplibinasieat 6

sibindegsamaiciaiesseniimenidansadcinaaas 6,15

rics eussepcivedeietan eankeessiiiisaenescenaiialedlichameediiaal 2

recalsitioehsisstineablipaaad 13

Fried, Privacy, 77 Yale L. J. 475 (1968)

Statement of Fact,

1526, Maine Legislature (1977)

Legislative Document No.

No. 80-

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1980

RICHARD S. COHEN, ATTORNEY GENERAL,

STATE OF MAINE,

Petitioner,

EQUIFAX SERVICES, INC.,

FRANK W. ROBINSON AND PAUL D. WEEKS,

Respondents

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME JUDICIAL COURT

OF THE STATE OF MAINE

The Petitioner, the Attorney General of the State of Maine,

respectfully prays that a writ of certiorari issue to review the

judgment of the Supreme Judicial Court of the State of Maine

entered in this proceeding on September 9, 1980.

OPINIONS BELOW

The opinion of the Maine Supreme Judicial Court is reported

at 420 A. 2d 189 (Me. 1980), and is attached to this petition as

Appendix A. The unreported opinion of the Maine Superior

Court for Kennebec County is attached as Appendix B.

JURISDICTION

The judgment of the Maine Supreme Judicial Court was en-

tered on September 9, 1980, and this petition has been filed

within the required time. The jurisdiction of this Court is in-

voked pursuant to 28 U.S.C. § 1257(3).

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED

United States Constitution, Amendment I:

Congress shall make no law respecting an establishment of re-

ligion, or prohibiting the free exercise thereof; or abridging the

freedom of speech, or of the press, or the right of the people

peaceably to assemble, and to petition the Government for a re-

dress of grievances.

Maine Revised Statutes Annotated, Title 10:

§ 1314. Preparation and procurement of investigative consumer

reports

1. Notice to consumer required. A person may not procure

or cause to be prepared an investigative consumer report on any

consumer unless:

A. That person has provided the consumer with

clear and conspicuous written notice of the requested

procurement or preparation and the consumer has, in

turn, given a signed written authorization for each

procurement or preparation; or

B. The report is to be used in connection with an in-

vestigation of an employee by that employee’s present

employer involving an employment purpose for

which the employee has not specifically applied.

§ 1321. Prohibited information, accuracy, relevancy and obso-

lescence of information in reports

1. Reporting agencies. No consumer reporting agency

shall prepare, use or report information:

A. Relative to a consumer’s race, religion, color, an-

cestry, ethnic origin, sexual preference or orientation,

political affiliation or political beliefs, except to the

extent required by governmentally imposed record-

keeping requirements or to the extent necessary to

prepare, use or report information relative to an

arrest or criminal charge, as provided in paragraph B,

or a consumer’s marital status; or

B. Relative to an arrest or a criminal charge or ad-

mission of wrong doing in connection with a deten-

tion pursuant to Title 17, section 3521, unless there

has been a criminal conviction for that offense or

unless the charge is still pending, and, additionally,

when the information reflects sexual preference or

orientation, unless the conduct which is the basis of

the arrest or criminal charge constitutes an offense

under the provisions of the Maine Criminal Code or

comparable law of another jurisdiction.

2. Irrelevant or inaccurate information. A consumer re-

porting agency shall not prepare, use or report information

which it has reason to believe is inaccurate or not relevant to the

purpose for which it is sought.

3. Procedures to insure report accuracy. A consumer re-

porting agency shall adopt and follow reasonable procedures

designed to assure maximum possible accuracy of the informa-

tion concerning the individual to whom the report relates and

exclude from its file inaccurate information, information which

cannot be verified, and information which it has no reason to

believe is not relevant to the purpose for which it is sought.'

4. Items prohibited in reports.

A. Except as authorized under paragraph B, no

consumer reporting agency may make any consumer

report or investigative consumer report containing

any of the following items of information:

(1) Bankruptcies which, from date of adjudication

of the most recent bankruptcy, antedate the report

by more than 14 years;

‘It appears that the placement of the word “‘no”’ in this subsection represents a

legislative drafting error. The intent of the Legislature was that a consumer re-

porting agency exclude from its files information which it has reason to believe

is not relevant to the purpose for which it is sought.

vy.

(2) Suits and judgments which, from date of entry,

antedate the report by more than 7 years or until

the governing statute of limitations has expired,

whichever is the longer period;

(3) Paid tax liens which, from the date of payment,

antedate the report by more than 7 years;

(4) Accounts placed for collection or charged to

profit and loss which antedate the report by more

than 7 years;

(5) Records of arrest or of conviction of crime

which, from date of disposition, release or parole,

antedate the report by more than 7 years;

(6) Information regarding drug or alcoholic addic-

tion unless such information is provided by a li-

censed practicing physician and the information

relating to such addictions does not antedate the

consumer report or investigative consumer report

by more than 7 years;

(7) Information relating to past confinement in a

mental institution when the date of last confine-

ment antedates the report by more than 7 years;

and

(8) Any other adverse item of information which

antedates the report by more than 7 years.

B. The provisions of paragraph A are not applicable

in the case of any consumer credit report to be used in

connection with:

(1) A credit transaction involving, or which may

reasonably be expected to involve, a principal

amount of $50,000 or more;

(2) The underwriting of life insurance involving, or

which may reasonably be expected to involve, a

face amount of $50,000 or more except that the

provisions of paragraph A, subparagraphs 6 and 7

are not applicable in connection with the under-

writing of life insurance involving, or which may

reasonably be expected to involve, a face amount

of $25,000 or more;

(2-A) The underwriting of disability income insur-

ance involving, or which reasonably may be ex-

pected to involve, an indemnity for total disability

of $1,000 per month or more; or

(3) The employment of any individual at an annual

salary which equals, or which may reasonably be

expected to equal, $20,000 or more.

STATEMENT OF THE CASE

In July 1977, the Legislature of the State of Maine enacted

P.L. 1977, c. 514, known as the Maine Fair Credit Reporting

Act (hereinafter the “‘Maine Act’’) and codified at Title 10 of the

Maine Revised Statutes Annotated (M.R.S.A.) § 1311 et seg.

The purpose of the Maine Act was set forth in the statement of

legislative intent which accompanied the original bill:

“This bill is introduced in order to limit intrusive

abridgment of the right to privacy, while correspon-

dingly preserving the interest in free inquiry and

proper dissemination of appropriate information. It

is intended to strengthen serious deficiencies in the

Federal Fair Credit Reporting Act.’ Statement of

Fact to Legislative Document No. 1526, Maine Legis-

lature (1977).

Briefly stated, consumer reporting is a process in which a

business entity (known as a “consumer reporting agency”’) ob-

tains and disseminates information, pursuant to a contractual

relationship, to another business entity (usually a prospective

insurer, credit grantor, or employer) concerning an individual

(known as a “‘consumer’’). The recipient of the information (the

“user’’) utilizes this information as one means of evaluating the

consumer’s eligibility for insurance, credit, employment, or

some other “economic benefit”. A “consumer report’? means

any communication by a consumer reporting agency, bearing

on such matters as a consumer’s credit worthiness and employ-

ment status, which is expected to be used as a factor in establish-

ing the consumer’s eligibility for an economic relationship

between the user and the consumer. 10 M.R.S.A. § 1312(3). An

“investigative consumer report” is a consumer report which in-

cludes information “‘bearing on a consumer’s character, general

reputation, personal characteristics or mode of living”’ which is

obtained from neighbors, friends or associates of the consumer.

10 M.R.S.A. § 1312(7).?

As indicated in the statement of legislative intent quoted

above, the Maine Act supplements the provisions of the Federal

Fair Credit Reporting Act (hereinafter the ‘“‘Federal Act’’), co-

dified at 15 U.S.C. § 1681 et seg. The Maine Act and the Feder-

al Act contain similar provisions designed to enhance the

accuracy and reliability of consumer reports. Both the Maine

Act and the Federal Act limit the reporting of certain items of

“dated information’’, events deemed to have occurred too far in

the past to be relevant to the purpose of determining the con-

sumer’s current credit worthiness. See 10 M.R.S.A. § 1321(4),

15 U.S.C. § 1681c. However, the Maine Act contains additional

regulatory controls which provide significantly greater protec-

tion to the privacy interests of consumers than is afforded by the

Federal Act. Among these added provisions are those declared

unconstitutional by the Maine Supreme Judicial Court: 10

M.R.S.A. § 1314(1) and 10 M.R.S.A. § 1321.

Section 1314(1) of the Maine Act provides that, with an ex-

ception stated in § 1314(1) (B), no investigative consumer report

can be prepared until the consumer who is the subject of the

proposed report executes a signed written authorization for the

preparation of the report. Section 1321(1) states that “no con-

sumer reporting agency shall prepare, use, or report” certain ca-

tegories of information relating to the consumer’s personal life.

The prohibitions in § 1321(1) (A) include information concern-

ing a consumer’s race, religion, ethnic origin, sexual preference,

and political affiliation. Furthermore, § 1321(1) (B) prohibits

the reporting of arrest information, in most cases, unless there

?The entire Maine Act is attached to this petition as Appendix C, so that the

Court has immediate access to the precise statutory language. Although the

Maine Act has been amended in several respects since its original enactment,

the overall regulatory scheme has not changed significantly. Moreover, the

questions raised by Pet.:ioner are intended to relate solely to the current ver-

sion of the Maine Act.

has been a criminal conviction subsequent to the arrest or unless

the charge is still pending. Section 1321(3) requires that con-

sumer reporting agencies exclude from their files information

which is inaccurate or irrelevant to the purpose of the report.

Section 1321(4), as noted above, limits the reporting of specified

items of dated information to situations enumerated in § 1321(4)

(B). These content limitations reflected a legislative judgment

that the harm caused to the privacy interests of consumers by

the dissemination of certain categories of personal information

through the medium of consumer reporting outweighs the inter-

ests of business in obtaining an unlimited amount of personal

information.

In October 1977, suit was brought against the Attorney Gen-

eral of the State of Maine by Equifax Services, Inc., Frank W.

Robinson, and Paul D. Weeks (hereinafter ““Respondents”’).

Respondent Equifax Services is a consumer reporting agency

which does a substantial volume of business in Maine. Respon-

dents Weeks and Robinson are employees of Equifax Services.

Respondents’ Complaint challenged the constitutionality of the

Maine Act on a variety of grounds, invoking the First Amend-

ment, the Due Process Clause, the Equal Protection Clause, the

Supremacy Clause, and the Commerce Clause. Following trial,

the Maine Superior Court for Kennebec County issued a deci-

sion dated March 30, 1979, which held, inter alia, that § 1314

and § 1321 of the Maine Act were violative of the First Amend-

ment to the United Stutes Constitution. App. at B 12.°

The Attorney General (hereinafter “‘Petitioner”’) appealed the

decision of the Superior Court to the Maine Supreme Judicial

Court. In a decision dated September 9, 1980, the Supreme Ju-

dicial Court essentially affirmed (with some modifications) the

judgment of the Superior Court as to § 1314 and § 1321. The Su-

preme Judicial Court held, inter alia, that § 1314(1), § 1321(1), §

1321(4) (A), and those portions of § 1321(2) and § 1321(3) limit-

ing the use of “irrelevant” information violate the First Amend-

ment to the United States Constitution, as applied to the States

through the Fourteenth Amendment.

>For the sake of clarity and brevity, this Statement of the Case does not discuss

the resolution of those constitutional issues not currently before this Court.

In summary, the Supreme Judicial Court ruled that: the activ-

ities of Respondents involve “commercial speech” (App. at A

11); both § 1314 and § 1321 are direct restrictions on the content

of commercial speech (App. at A 12); the provisions of § 1314

either do not further a substantial governmental interest, or

these provisions are inadequately tailored to the governmental

interest (App. at A 21); and the provisions of § 1321 which pro-

ceed beyond regulation of the accuracy of consumer reports

cannot be valid. (App. at A 35). The holding of the Supreme Ju-

dicial Court was based upon the standard of review for com-

mercial speech articulated by this Court in Central Hudson Gas

& Electric Corporation v. Public Service Commission of New

York, — U.S. —, 100 S. Ct. 2343, 2350-2351, 65 L. Ed. 2d 341,

349-350 (1980). Apparently, the Supreme Judicial Court reject-

ed Petitioner’s argument that consumer reporting is a type of

“commercial speech”’ entitled to a lesser degree of First Amend-

ment protection than commercial advertising.

REASONS FOR GRANTING THE WRIT

I. The Maine Supreme Judicial Court Erroneously

Equated Consumer Reporting With Advertising in

Terms of First Amendment Protection

This case presents this Court with an opportunity to clarify

the scope of the commercial speech doctrine. The analysis of the

Supreme Judicial Court was predicated on the assumption that

consumer reporting is entitled to the same degree of First

Amendment protection as commercial advertising. Petitioner

believes that neither the precedents from this Court nor the

practical distinctions between consumer reporting and advertis-

ing support this critical assumption. Moreover, the reasoni.ig of

the Supreme Judicial Court, if followed generally, would erect

serious obstacles to the regulation of “‘commercial activity

deemed harmful to the public whenever speech is a component

of that activity.”” Ohralik v. Ohio State Bar Association, 436 U.S.

447, 458 (1978). See also Friedman v. Rogers, 440 U.S. 1, 10-11,

n. 9 (1979).

A satisfactory definition of “‘commercial speech” has been

somewhat elusive. See Central Hudson Gas & Electric Corpora-

tion v. Public Service Commission, supra, — U.S. at —, 100 S.

Ct. at 2358, 65 L. Ed. 2d at 360 (Stevens, J., concurring). How-

ever, it seems clear that ‘‘[t]he First Amendment’s concern for

commercial speech is based on the informational function of ad-

vertising.”’ Central Hudson Gas & Electric Corporation v. Public

Service Commission, supra, — U.S. at —, 100 S. Ct. at 2350, 65

L. Ed. 2d at 349. In the normal realm of commercial advertis-

ing, the speaker provides information to the consumer in an at-

tempt to persuade the consumer to engage in an economic

transaction beneficial to the speaker. The consumer is free to

accept or reject the information. Significantly, the consumer has

no personal stake in the content of the information, which usu-

ally involves discussion of products or services. Unless the ad-

vertising is false or: deceptive, its content rarely proves

detrimental to the consumer. In fact, advertising frequently con-

veys “information of potential interest and value to a diverse

audience .. . .” Bigelow v. Virginia, 421 U.S. 809, 822 (1975).

The situation regarding consumer reporting is quite different.

The consumer reporting agency is not “‘speaking” to the con-

sumer in any respect. Rather, the consumer reporting agency in-

vestigates and prepares information for the use of a third party

which is considering an economic transaction with the consum-

er. This information may range from readily obtainable credit

history information to subjective material concerning the con-

sumer’s personal life. Appendix D to this petition, a form used

by Respcndent Equifax Services (and introduced into evidence

by Petitioner at trial), illustrates the kinds of information

sought by consumer reporting agencies. Upon completion of

the investigation, the consumer reporting agency transmits its

report to the user, which utilizes the information to evaluate its

potential economic relationship with the consumer. Therefore,

in this three party arrangement the consumer is neither the

speaker nor the listener; he is merely the subject of a consumer

report, a communication from the consumer reporting agency

to the user.

Presumably, the consumer understands that when he applies

for insurance, credit, or employment, information concerning

his economic reliability may be collected and evaluated. How-

ever, the consumer may not understand that, absent regulatory

legislation, an investigative consumer report may contain such

matter as the opinion of a neighbor concerning the consumer’s

political beliefs and sex life. In light of the fact that such person-

al information generally does not bear a reasonable relationship

to a consumer’s insurability or credit worthiness, the Maine Act

supports the reasonable expectation that certain kinds of infor-

mation will be kept private. Therefore, the Maine Act rep-

resents an attempt to balance the needs of economic

decisionmakers against the interests of the individual in control-

ling the dissemination of information concerning his personal

life.

The relationship of consumer reporting to the “‘marketplace

of ideas” protected by the First Amendment, Red Lion Broad-

casting Co. v. Federal Communications Commission, 395 U.S.

367, 390 (1969), is, at best, indirect. The contents of consumer

reports are not intended to provoke public debate. (See the con-

fidentiality provisions in Appendix D). While the business activ-

ity of Respondents involves the use of information, it is

considerably different in purpose and effect from the function

of the press or the role of advertising. See Hood v. Dun & Brads-

treet, Inc., 486 F. 2d 25, 30 (Sth Cir. 1973), cert. denied, 415 US.

985 (1974); Grove v. Dun & Bradstreet, Inc., 438 F. 2d 433, 437

(3d Cir. 1971), cert. denied, 404 U.S. 898 (1972). Unlike individ-

uals whose activities are reported in the mass media, the sub-

jects of consumer reports do not have direct access to the

information disseminated concerning them. In contrast to the

recipients of advertising, who may avoid intrusion by declining

to read or hear the message, the subject of an investigative con-

sumer report cannot control the extent of the intrusion into his

private life. This Court has recognized that intrusive commer-

cial activity may be regulated in the public interest even though

the activity includes an expressive element. See Ohralik v. Ohio

State Bar Association, supra, 436 U.S. at 465, n. 25.

Petitioner submits that the intrusive nature of consumer re-

porting renders it subject to types of regulation which might not

be valid if applied to advertising, and that the Supreme Judicial

Court erred in equating consumer reporting with advertising in

terms of First Amendment protection.

II. The Decision of the Maine Supreme Judicial

Court Reflects an Erroneous View, of the

State’s Interest in Protecting Personal

Privacy

In judging the constitutionality of the Maine Act, the Su-

preme Judicial Court applied the four part test for commercial

speech set forth in Central Hudson Gas & Electric Corporation v.

Public Service Commission of New York, supra, — U.S. at —,

100 S. Ct at 2350-2351, 65 L. Ed. 2d at 349-350. After finding

that consumer reporting could not be deemed false or mislead-

ing per se, the Court assessed the State’s asserted substantial in-

terest in protecting personal privacy. The Court concluded that

the interest in protecting privacy could be considered a “‘suo-

stantial governmental interest’ only in those limited circum-

stances in which a “right to privacy’, derived from the

Constitution or tort law, has previously been held to exist. In

the Court’s words:

“It would appear, then, that the above delineated par-

ticular ‘zones’ or ‘areas’, as intruded upon by the par-

ticular conduct described, represent the extent of a

governmental interest in protecting ‘privacy’ that may

fairly be taken as being substantial.” App. at A 20.

The Court proceeded to hold that the provisions of § 1314(1)

and § 1321 either are not supported by a substantial governmen-

tal interest, or fail to directly advance that interest in a manner

least restrictive of expression.

It is apparent that the Supreme Judicial Court misunderstood

the meaning of the term ‘“‘substantial governmental interest”’

within the framework of the Central Hudson test. A governmen-

tal interest need not assume constitutional dimension in order

to be substantial. On many occasions, when privacy interests

have been asserted in support of regulations limiting expressive

activity, this Court has found such interests to be substantial

without reference to the Constitution or tort law. See, for exam-

ple, Carey v. Brown, — U.S. —, 100 S. Ct. 2286, 2296, 65 L. Ed.

2d 263, 276 (1980); Ohralik v. Ohio State Bar Association, supra,

436 U.S. at 465; Breard v. Alexandria, 341 U.S. 622, 644-645

(1951). This Court has stated that:

“The State’s interest in protecting the well-being,

tranquility, and privacy of the home is certainly of the

highest order in a free and civilized society.”” Carey v.

Brown, supra, — U.S. at —, 100 S. Ct. at 2296, 65 L.

Ed. 2d at 276.

Certainly, the protection of an individual’s reasonable expecta-

tions of informational privacy ranks equally with the protection

of residential privacy as an important governmental interest.

This Court has noted that, while the Constitution protects indi-

viduals from certain kinds of governmental intrusion:

“the protection of a person’s general right to privacy

— his right to be let alone by other people — is, like

the protection of his property and of his very life, left

largely to the law of the individual States.” [footnotes

omitted] Katz v. United States, 389 U.S. 347, 350-351

(1967).

The unduly restrictive view of the State’s interest in protecting

privacy represented the most serious flaw in the reasoning of the

Supreme Judicial Court. This error tainted the Court’s subse-

quent analysis of the third and fourth components of the Cen-

tral Hudson test.

As described supra, consumer reporting implicates privacy

concerns not present in the area of advertising, and the Maine

Act attempts to protect the consumer from unnecessarily intru-

sive probing into his private life. Consumer reporting is intru-

sive in two aspects which are related but are discrete. First, the

act of preparing an investigative consumer report includes, by

definition, personal interviews with friends, neighbors, and as-

sociates of the consumer. These interviews intrude directly upon

the persons being interviewed, and indirectly upon the subject

of the report. Secondly, the kinds of questions asked during an

investigation may elicit information not reasonably relevant to

the economic purpose underlying the report. The dissemination

of such inappropriate information invades the privacy of the

consumer and may result in reputational injury.

Section 1314(1) of the Maine Act addresses the first intrusive

aspect of consumer reporting by requiring that the consumer

consent before the investigative process can commence. In other

words, the consumer is allowed to decide whether a consumer

reporting agency may commence a detailed investigation into

his personal affairs. Of course, the prospective user of the report

retains the right to refuse the economic benefit sought by the

consumer if he declines to authorize the investigative report.

But § 1314(1) serves two important functions. Initially, it makes

the consumer aware of the privacy cost involved in his applica-

tion for insurance, credit, or employment. Further, § 1314(1)

provides the consumer with some control over the dissemina-

tion of information in which he has a personal stake. “*Privacy is

not simply the absence of information about us in the minds of

others; rather it is the control we have over information about

ourselves.”’ Fried, Privacy, 77 Yale L. J. 475, 482 (1968).

It should be noted that § 1314(1) and § 1321 do not directly in-

fringe upon the activities of insurance companies, banks, etc.

These economic decisionmakers remain free to collect and use

any information they deem appropriate. Viewed in this light,

the authorization requirement represents a regulation of the

manner of obtaining information, a limitation on the conduct of

investigative consumer reporting rather than a restriction on ex-

pression per se. See American Future Systems, Inc. v. Pennsylva-

nia State University, 618 F. 2d 252 (3d Cir. 1980), which stands

for the proposition that commercial activity may be regulated

notwithstanding an incidental effect upon commercial speech.

The second aspect of the intrusiveness of consumer reporting

relates directly to the nature of the information disseminated.

Section 1321 of the Maine Act reflects a legislative judgment

that certain categories of information, such as race, religion,

and ethnic origin, are not appropriately contained in reports in-

tended to aid in the assessment of a consumer’s eligibility for in-

surance, employment, or credit. The only effective way of

enforcing this legislative judgment is to limit the reporting of in-

appropriate information. The mere dissemination of inappro-

priate information harms the privacy interests of the consumer,

even if the user of the report does not base its decision on such

information. Therefore, unlike advertising, information con-

tained in consumer reports can be harmful even if it is not false

or misleading. Since “the individual’s right to the protection of

his good name is a basic concept of human dignity which is at

the root of any system of ordered liberty’, Roemer v. Retail

Credit Company, 44 Cal. App. 3d 926, 932, 119 Cal. Rptr. 82, 85

(1975), the State has a substantial interest in limiting the content

of consumer reports to information which is relevant to the pur-

pose of the reports. Furthermore, this interest cannot be ad-

vanced in a manner less restrictive than the means chosen by the

Maine Legislature. It has been recognized that restrictions re-

lated to the content of expression are more likely to withstand

scrutiny in a commercial speech framework than if fully pro-

tected speech were involved. See Central Hudson Gas & Electric

Corporation v. Public Service Commission, supra, — U.S. at —,

100 S. Ct. at 2354, 65 L. Ed. 2d at 354; Virginia Board of Phar-

macy v. Virginia Citizens Council, 425 U.S. 748, 771-772, n. 24

(1976). See also Federal Communications Commission v. Pacifica

Foundation, 438 U.S. 726, 744 (1978); Young v. American Mini

Theatres, Inc., 427 U.S. 50, 68-69 (1976).

In sum, both § 1314 and § 1321 represent regulatory means

which are well tailored to address the unique privacy problems

raised by consumer reporting. In contrast to many of the recent

precedents involving commercial advertising, the Maine Act

does not impose a sweeping prohibition on a medium of ex-

pression. The consumer authorization requirement of § 1314(1)

and the content limitations of § 1321 are designed to regulate the

consumer reporting industry, ‘“‘an area traditionally subject to

government regulation”, Ohralik v. Ohio State Bar Association,

supra, 436 U.S. at 456, in a manner which serves both the infor-

mational needs of commerce and the privacy needs of consum-

ers. Careful analysis will lead this Court to the conclusion that

neither section violates the First Amendment to the United

States Constitution.

III. The Ability of the State and Federal

Governments to Regulate Consumer Reporting

in a Manner Consistent with the Evolving

Commercial Speech Doctrine Represents an

Important Question of Federal Law.

In declaring § 1314(1) and much of § 1321 of the Maine Act

unconstitutional, the Maine Supreme Judicial Court has ex-

tended this Court’s recent holdings concerning advertising to

the regulation of consumer reporting, an area to which the pre-

cedents are not controlling. As Petitioner has argued supra,

are compelling reasons to distinguish consumer reporting from

advertising. Moreover, the decision casts doubt upon the validi-

ty of a substantial number of State statutes.

Aside from Maine, at least thirteen States have laws which

regulate consumer reporting in some manner.‘ Ten of these

States have placed limits on the content of consumer reports;

most of these limits relate to dated information and criminal

history information. Presumably, all of these limitations would

be invalid under the rationale adopted by the Supreme Judicial

Court. The New York Fair Credit Reporting Act contains a

provision, almost identical to § 1314(1) of the Maine Act, which

prohibits the preparation of an investigative consumer report

without the consent of the consumer who is the subject of the

report. N. Y. Gen. Bus. Law § 380-c(a) (McKinney 1979 Supp.).

Moreover, as the Supreme Judicial Court noted in its decision,

the Federal Act limits the use of dated information in consumer

reports. 15 U.S.C. § 1681c. If allowed to stand, the reasoning of

the decision below would render unconstitutional this portion

of the Federal Act.

Therefore, the Maine Act does not stand in isolation; it is one

of many statutory schemes which regulate the consumer report-

ing industry. While Petitioner acknowledges that the expressive

component of consumer reporting is not entirely outside the

scope of First Amendment protections, there is no authority for

the proposition that all types of commercial speech must be ac-

corded the same protection as advertising. The most recent au-

thoritative statement on the subject of consumer reporting

appeared in Millstone v. O’Hanlon Reports, Inc., 528 F. 2d 829

(8th Cir. 1976), which was decided shortly after the commence-

ment of the shift in commercial speech doctrine. More precisely,

‘Arizona - Ariz. Rev. Stat. § 44-1691 et seqg.; California - Cal. Civ. Code

§ 1785.1 et seg.; Kansas - Kan. Stat. Ann. § 50-70 et seg.; Maryland - Md.

Comm. Law Code Ann. § 14-1201 ef seqg.; Kentucky-Ky. Rev. Stat.

§ 367.310; Massachusetts - Mass. Gen. Laws Ann. c. 93, § 50 et seq.; Montana-

Mont. Rev. Codes Ann. § 18-501 et seg.; New Hampshire - N.H. Rev. Stat.

Ann. § 359-B:1 et seg.; New Mexico - N.M. Stat. Ann. § 56-3-1 ef seq.;

Nevada - Nev. Rev. Stat. § 598B.130; Connecticut - Conn. Gen. Stat. Ann.

§ 36-431 et seg.; Oklahoma - Okla. Stat. Ann. tit. 24, § 81 et seq.; New York -

N.Y. Gen. Bus. Law (McKinney), § 380 et seq.

Millstone was decided after the decision in Bigelow v. Virginia,

supra, but before Virginia Board of Pharmacy v. Virginia Citi-

zens Council, supra. In Millstone the Eighth Circuit upheld the

constitutionality of the Federal Act. The court noted that “‘the

challenged statute supports and protects a significant personal

right, the right to privacy’’, 528 F. 2d at 823, and concluded

that:

“it is our view that . . . consumer credit reports are

not protected speech for which under the First

Amendment ‘Congress shall make no law...’ ”

528 F. 2d at 833

If the reasoning developed in Millstone has not been under-

mined by Virginia Pharmacy and its progeny, a conflict involv-

ing principles of constitutional ..w exists between the Maine

Supreme Judicial Court and the Eighth Circuit. Even if the

extent of the holding in Millstone has been rendered suspect by

subsequent commercial speech decisions of this Court, there is

still no good reason to equate consumer reporting with advertis-

ing in terms of First Amendment protection.

The courts have consistently held that credit reporting agen-

cies (engaged in credit investigations of consumers and/or busi-

nesses) do not possess an immunity from libel actions which is

grounded in the First Amendment.’ See Hood v. Dun & Brad-

street Inc., supra; Oberman v. Dun & Bradstreet, Inc., 460 F. 2d

1381 (7th Cir. 1972); Kansas Electric Supply Company v. Dun &

Bradstreet, Inc., 448 F. 2d 647 (10th Cir. 1971); Grove v. Dun &

Bradstreet, Inc., supra; Wortham v. Dun & Bradstreet, Inc., 399

F. Supp. 633 (S.D. Texas 1975), aff 'd., 537 F. 2d 1142 (Sth Cir.

1976); Roemer v. Retail Credit Company, supra; Retail Credit

Company v. Russell, 234 Ga. 765, 218 S. E. 2d 54 (1975). More-

over, no lower court has held that the commercial speech cases

decided by this Court should be construed to provide a constitu-

tionally based immunity for consumer reporting agencies. See

Thornton v. Equifax, 619 F. 2d 700, 705 (8th Cir. 1980), cert.

denied, 49 U.S.L.W. 3266 (1980). These cases are instructive be-

‘In effect, the credit reporting agencies argued that the “‘actual malice’’ stan-

dard articulated in New York Times v. Sullivan, 376 U.S. 254 (1964), should

apply to libel actions arising from their activities.

cause, in the course of analyzing the First Amendment interests

at stake, the courts have emphasized the differences in opera-

tion between consumer reporting agencies and institutions, such

as the press, traditionally protected under the First Amend-

ment.

As this Court has noted on several occasions, there are sub-

stantial distinctions between the regulation of expression related

to commercial activity and the regulation of “fully protected”

speech. The decision of the Supreme Judicial Court miscon-

strues the precedents of this Court and erodes these critical dis-

tinctions. Furthermore, the reasoning of the decision appears to

imperil other well-established types of economic regulation, in-

cluding securities laws, labor laws, antitrust laws, and debt col-

lection laws, all of which limit commercial expression to some

extent. See Ohralik v. Ohio State Bar Association, supra, 436

U.S. at 455-456.

Clearly, the decision of the Supreme Judicial Court places un-

precedented limitations on the power of government to regulate

consumer reporting in the public interest. This Court should

review that decision to correct an erroneous interpretation of

the First Amendment.

CONCLUSION

For the reasons stated above, a writ of certiorari should issue

to review the judgment and opinion of the Maine Supreme

Judicial Court.

DATED: December 1, 1980

Respectfully submitted,

RICHARD S. COHEN

ATTORNEY GENERAL,

STATE OF MAINE

WILLIAM J. KELLEHER

ASSISTANT ATTORNEY GENERAL

PETER B. BICKERMAN

ASSISTANT ATTORNEY GENERAL

DEPT. OF THE ATTORNEY GENERAL

STATE HOUSE

AUGUSTA, MAINE 04333

(207) 289-3661

A-l

APPENDIX A

MAINE SUPREME JUDICIAL COURT

Reporter of Decisions

Decision No. 2405

Law Docket No. Ken-79-13

EQUIFAX SERVICES, INC.,

FRANK W. ROBINSON and PAUL D. WEEKS

RICHARD S. COHEN, ATTORNEY GENERAL

Argued — September 20, 1979

Decided — September 9, 1980

Before McKUSICK, C.J., POMEROY,* WERNICK,

ARCHIBALD,** GODFREY #4» NICHOLS, JJ.

WERNICK, J.

The defendant Richard S. Cohen, in his capacity as the

present Attorney General of the State of Maine (substituted as

party defendant in this action in place of his predecessor in

office Joseph E. Brennan who was originally named as de-

fendant), has appealed from a judgment of the Superior Court

(Kennebec County) which: (1) adjudicated invalid particular

provisions of the Maine Fair Credit Reporting Act (hereinafter

the Maine Act), on the grounds that all of said provisions were

unwarranted restraints upon constitutionally protected com-

mercial speech and that some of them, because of their vague-

ness, also contravened constitutional due process of law; and (2)

permanently enjoined the defendant Attorney General from en-

forcing the statutory provisions thus invalidated.

By a cross appeal plaintiffs Equifax Services, Inc. (Equifax),

Frank Robinson and Paul Weeks contend that the judgment

wrongly decided some, and erroneously failed to decide some

others, of the additional attacks they made against various pro-

visions of the Maine Act.

* Pomeroy, J., sat at oral argument but retired prior to preparation of the

opinion.

** Archibald, J., sat at oral argument but retired prior to preparation of the

opinion. He joins the opinion as Active Retired Justice.

A-2

We deny the appeal and the cross appeal.

As we interpret the scope of the Superior Court judgment, we

affirm its injunction against the enforcement of Sections 1314

and 1321 of the Act, in their original and amended versions, as

adjudicating unconstitutional restraints upon commercial

speech. We affirm, too, the adjudication rejecting plaintiffs’

constitutional attack, asserted in Count 5 of their amended

complaint, based on the “‘supremacy” clause of Article VI of the

Constitution of the United States.

We modify the Superior Court’s judgment, however, in two

respects,

First, we add a clause to include an adjudication that Section

1323(2) is an unconstitutional abridgement of commercial

speech insofar as it authorizes an award of additional damages

for each “‘irrelevant”’ item included in a consumer report.

Second, we strike from the judgment, as determinations of

constitutional issues that were made unnecessarily in that they

related to the same provisions of the Maine Act the presiding

Justice had otherwise invalidated, correctly we decide, as un-

constitutional abridgements of commercial speech: (1) that part

holding various provisions “‘void for vagueness’’ and (2) that

part deciding in favor of defendant on Counts 3, 4 and 6 of

plaintiffs’ amended complaint which, together, alleged viola-

tions of the “‘commerce”’ clause, as well as the “due process of

law”’ (in substantive, as distinguished from procedural, terms)

and the “equal protection of the laws”’ clauses of the Fourteenth

Amendment to the Constitution of the United States.

I. FACTUAL AND PROCEDURAL BACKGROUND.

I-A. Nature of the Business Involved.

The plaintiff Equifax is a Georgia Corporation authorized to

do business in Maine. The plaintiff Frank Robinson was Vice-

President of a region of Equifax which included Maine, and the

plaintiff Paul Weeks was the manager of an Equifax office

maintained in Falmouth, Maine. Equifax engages in the busi-

ness of being a “consumer reporting agency”’, as defined in Sec-

A-3

tion 1312(4) of the Maine Act' and in the Federal Fair Credit

Reporting Act, 15 U.S.C.§ 1681a(f)? (the Federal Act). Equifax

has offices all over the United States, several of which are lo-

cated in Maine.

As a consumer reporting agency, Equifax gathers and sells in-

formation about individuals who have applied for credit, insur-

ance or employment (or the like). Among the purchasers of

these informational reports (““consumer reports’’) are insurance

companies, banks and diverse kinds of employers. We refer to

the purchasers of consumer reports as “‘users.”’ The users need

information from various sources to enable them properly to

evaluate a consumer’s qualifications and capacity to undertake

the particular transactions involved in applications of consum-

ers for credit, insurance coverage, employment and so forth.

Approximately 80 to 85 percent of the Maine users to which

Equifax has furnished consumer reports have been engaged in

the business of insurance. In 1976, Equifax furnished more than

60,000 consumer reports to users in the State of Maine, and in

1977 and 1978 the volume of such reports was approximately

the same.

'10 M.R.S.A. § 1312(4) (Supp. 1979-80):

“* ‘Consumer reporting agency’ means any person who, for mone-

tary fees, dues or on a cooperative nonprofit basis, regularly en-

gages in whole or in part in the practice of assembling or

evaluating consumer credit information or other information on

consumers for the purpose of furnishing consumer reports or in-

vestigative consumer reports to 3rd parties.

“For purposes of this chapter, the phrase ‘3rd party’ shall not in-

clude an insurer to the extent consumer credit information or

other information on consumers is furnished to the insurer by its

own employee or licensed agent.”

715 U.S.C. § 1681a(f) (1974):

“(f) The term ‘consumer reporting agency’ means any person

which, for monetary fees, dues, or on a cooperative nonprofit

basis, regularly engages in whole or in part in the practice of as-

sembling or evaluating consumer credit information or other in-

formation on consumers for the purpose of furnishing consumer

reports to third parties, and which uses any means or facility of

interstate commerce for the purpose of preparing or furnishing

consumer reports.”

A-4

The reports themselves vary in nature and scope, depending

on the purposes for which they may be drawn. Thus, for exam-

ple, the reports to life insurance companies will be in a form and

have a content to assist in the underwriting of life, health and

disability insurance; as furnished to fire and casualty insurers,

the reports will be geared to help the underwriting of fire and

casualty policies on home or automobile; as provided to em-

ployers, the reports will be formulated to be of benefit in the

making of hiring decisions as to various kinds of work; and as

sent to banks, reports will be formulated to be of benefit in the

evaluation of applicants for loans. Equifax uses numerous

printed forms containing a series of questions about consumers,

the questions being devised to relate to particular transactions

involved. The scope of the information may include data on a

consumer’s past or present employment, home environment,

hobbies, health, use of alcohol or drugs, criminal record, credit

record, military record, sources of income, financial stability,

reputation, and so forth. In consequence of consultations be-

tween Equifax and users, the information supplied in the re-

ports conforms very generally to areas designated by users, and

various questionnaire forms are prepared and utilized to obtain

the kinds of information users wish to have furnished. The pro-

cess of gathering information also varies according to the pur-

pose and nature of the consumer report. Typically, field

investigators employed by Equifax compile information

through personal interviews with the consumers who are the

subjects of reports, through interviews with their friends, neigh-

bors and associates and also through investigations of public

records.

Although the uses to which consumer reports may be put

vary according to the needs of particular users, the record

before us suggests that at least in the insurance context, which

encompasses the large majority of the reports furnished in

Maine, the reports are used mainly to achieve a final verifica-

tion of information received from other sources — such as, for

example, the information acquired from insurance application

forms and from the observations, or reports, or both, of insur-

ance agents. The consumer reports serve to verify and supple-

ment data received through these other sources. Should an

inconsistency appear concerning an important aspect of an ap-

A-5

plication, a further investigation may be ordered either by the

user or the consumer reporting agency in an effort to clarify the

inconsistency. Thus, consumer reports generally serve as one,

albeit an important, source of information through which users

seek to obtain information to assist them in making decisions

incident to the conduct of their businesses.

I-B. The Federal Regulatory Scheme.

It will assist us fully to understand the Maine regulatory

scheme if we first examine various provisions of the Federal

Act, which also regulates large parts of the consumer reporting

industry as conducted in Maine.

In October 1970, the Congress of the United States enacted

the Federal Act, 15 U.S.C. §§ 1681-1681t (1974). While express-

ly recognizing the primacy of the value of maintaining a free

flow of fair, accurate information, as well as that

‘*[c]Jonsumer reporting agencies have assumed a vital

role in assembling and evaluating consumer credit

and other information on consumers,” 15 U.S.C.

§ 1681(a) (3) (1974),

Congress sought to protect consumers from arbitrary, secretive

reporting procedures, and inaccurate and intrusive reporting.

See 15 U.S.C. § 1681(a) (1), (4) (1974). The regulatory scheme

established by Congress includes the following provisions. It

limits the purposes for which a ‘‘consumer report’”’ may be fur-

nished, requiring that the reporting agency must reasonably be-

315 U.S.C. 1681a(d) (1974) defines “‘consumer report”’:

“The term ‘consumer report’ means any written, oral, or other

communication of any information by a consumer reporting

agency bearing on a consumer’s credit worthiness, credit stand-

ing, credit capacity, character, gencral reputation, personal char-

acteristics, or mode of living which is used or expected to be used

or collected in whole or in part for the purpose of serving as a

factor in establishing the consumer’s eligibility for (1) credit or in-

surance to be used primarily for personal, family, or household

purposes, or (2) employment purposes, or (3) other purposes au-

thorized under section 1681b of this title. The term does not in-

clude (A) any report containing information solely as to

transactions or experiences between the consumer and the person

making the report; (B) any authorization or approval of a specific

A-6

lieve that the user of the report has a “‘legitimate”’ business need

for the information, as clarified by certain enumerated uses. See

15 U.S.C. § 1681b (3). For any other purpose, a reporting

agency must obtain either prior consent of the subject-consumer

or a court order. 15 U.S.C. § 1681b(1), (2). The Federal Act

flatly prohibits the making of a consumer report containing cer-

tain dated public record information, such as a bankruptcy

record over fourteen years old, or tax liens, arrest records, and

any ‘“‘other adverse item of information” over seven years old.

15 U.S.C. § 1681c(6). Section 1681d requires that when a user

requests an “‘investigative consumer report,’”* — a consumer

report containing information relating to, among others, a con-

sumer’s character, general reputation or mode of living, see 15

U.S.C. § 1681a(e), — unless the report is to be used for the pur-

pose specified in Section 1681d(a) (2), a consumer must be given

clear, written notice that (1) such a report was requested and (2)

the consumer is entitled to disclosure from the user of the

‘nature and scope”’ of the investigation. Furthermore, report-

ing agencies are required to establish procedures designed to

keep information current, accurate, and confidential, and to

extension of credit directly or indirectly by the issuer of a credit

card or similar device; or (C) any report in which a person who

has been requested by a third party to make a specific extension of

credit directly or indirectly to a consumer conveys his decision

with respect to such request, if the third party advises the consum-

er of the name and address of the person to whom the request was

made and such person makes the disclosures to the consumer re-

quired under section 1681m of this title.”

*15 U.S.C. § 168la(e) (1974) defines “investigative consumer report”:

“The term ‘investigative consumer report’ means a consumer

report or portion thereof in which information on a consumer's

character, general reputation, personal characteristics, or mode of

living is obtained through personal interviews with neighbors,

friends, or associates of the consumer reported on or with others

with whom he is acquainted or who may have knowledge con-

cerning any such items of information. However, such informa-

tion shall not include specific factual information on a consumer's

credit record obtained directly from a creditor of the consumer or

from a consumer reporting agency when such information was

obtained directly from a creditor of the consumer or from the

consumer.”

A-7

disclose upon request of the consumer the substance of the in-

formation on file, (15 U.S.C. §§ 168le, 1681g, 1681h), and to es-

tablish an investigation procedure to be followed when a

consumer disputes the accuracy of any information (15 U.S.C.

§ 1681i). Certain users are required to notify a consumer who is

denied employment, or insurance for personal, family, or

household purposes, or who is denied credit or is charged more

for such credit, where any such adverse decision results wholly,

or partly, from information contained in a consumer report.

Such notice includes the name and address of the consumer re-

porting firm. 15 U.S.C. § 1681m(a). Section 1681m(b) requires

that users, upon request, disclose the substance of the informa-

tion that resulted in adverse action. The Federal Act provides

civil liability and criminal sanctions for noncompliance with its

provisions. 15 U.S.C. §& 1681n, 16810, 1681q, 168Ir. It express-

ly permits the states also to regulate provided that state regula-

tion is not inconsistent with the Federal Act. 15 U.S.C. § 1681t.

I-C. The Maine Regulatory Scheme.

In July 1977 the Maine legislature enacted, effective October

24, 1977, the Maine Fair Credit Reporting Act (P.L. 1977,

c. 514). Essentially, the Maine Act paralleled the Federal Act,

except as to particular provisions pertinent to the instant pro-

ceeding that we discuss later. The Maine Act was amended in

1978, effective July 6, 1978 (P.L. 1977, c. 677).

In overview summary the Maine Act differs from the Federal

Act as follows. It goes beyond the Federal Act in imposing

stricter requirements upon reporting agencies regarding their

preparation and dissemination of consumer reports. Whereas

the Federal Act requires specific notice be given to a consumer

before a user can procure an “investigative consumer report,”’

the Maine Act prohibits a user from procuring such a report

until prior written authorization of the consumer is obtained. 10

M.R.S.A. § 1314(1).° In addition, the Maine Act provides for

510 M.R.S.A. § 1314(1) (Supp. 1979-80):

‘Notice to consumer required. A person may not procure or cause

to be prepared an investigative consumer report on any consumer

unless:

“*A. That person has provided the consumer with clear and

conspicuous written notice of the requested procurement or

A-8

many more absolute prohibitions against the reporting of infor-

mation. Whole categories of information, such as race, religion,

political affiliation and beliefs, and so forth, are classified as

prohibited and to be excluded from reports. See 10 M.R.S.A.

§ 1321(1).6 While adopting the prohibition contained in Section

1681c of the Federal Act against the inclusion of certain public

record information, the Maine Act adds two more prohibited

categories of public record information — relating to drug or al-

cohol addiction and confinement in a mental institution — and

also adds entirely new sections which prohibit information con-

cerned with race, religion, color, national ancestry (and the

like). See 10 M.R.S.A. § 1321(1), (4). Furthermore, the Maine

Act permits limited disclosures of medical information, 10

M.R.S.A. § 1315(1) (A) whereas the Federal Act excludes such

information from disclosure. Maine requires that “investigative

consumer reports be written”, 10 M.R.S.A. § 1319(2), whereas

the Federal Act allows them to be oral. The Maine Acct fails to

confer the qualified immunity given by the Federal Act relative

to consumer suits against designated persons for defamation,

invasion of privacy or negligence with respect to the reporting

of information, cf. 15 U.S.C. § 1681h(e).

I-D. Procedural History.

On October 13, 1977, Equifax, and the other plaintiffs, insti-

tuted a civil action in the Superior Court (Kennebec County)

against the then Attorney General of Maine, Joseph E. Bren-

nan. Plaintiffs sought a declaratory judgment adjudicating that

certain provisions of the Maine Act, about to take effect on Oc-

tober 24, 1977, were unconstitutional, and plaintiffs asked that

the Attorney General be permanently enjoined from enforcing

such provisions of the Act as would be adjudicated unconstitu-

preparation and the consumer has, in turn, given a signed

written authorization for each procurement or preparation;

“B. The report is to be used in connection with an investi-

gation of an employee by that employee’s present employer

involving an employment purpose for which the employee

has not specifically applied.”

°The text and substance of Section 1321 are set out at n. 12, infra.

A-9

tional. When the Maine Act became effective on October 24,

1977, a temporary restraining order was issued. It was subse-

quently dissolved when, on December 14, 1977, the Superior

Court Justice refused to order issuance of a preliminary injunc-

tion.

As we have mentioned, amendments to the Maine Act

became effective in July, 1978. Thereafter, plaintiffs filed an

amended complaint which restated their attack upon the Maine

Act as it read before being amended and added further chal-

lenges to the Act in light of the amendments to it. The defendant

Attorney General moved to dismiss on grounds of mootness

those paragraphs of the amended complaint challenging sec-

tions of the Act that had been repealed or modified. The Justice

denied this motion, and defendant’s appeal includes an attack

on the correctness of that ruling.

A hearing on the merits was held in November 1978, at which

plaintiffs presented several witnesses and introduced numerous

exhibits. Defendant presented no witnesses but introduced exhi-

bits including: (1) a deposition of the plaintiffs Weeks and

Robinson; (2) numerous examples of the forms used by Equifax

in collecting and reporting information; (3) excerpts from ma-

nuals used by employees of Equifax to guide them in the prepa-

ration of reports.’

On the basis of the record made before him, the Superior

Court Justice held unconstitutional two sections of the Maine

Act in both their originally enacted and subsequently amended

versions: (1) Section 1314, as requiring a consumer’s prior

consent before an “investigative consumer report” on him may

be procured, and (2) Section 1321, as outlawing the prepara-

tion and sale of reports containing delineated categories of pro-

hibited information. The ground of decision was that these

sections violated the First Amendment, as made binding on the

States by the Fourteenth Amendment, to the Constitution of

’At a hearing on the motion for a preliminary injunction on November 10,

1977, defendant introduced two affidavits of one individual who had allegedly

been the victim of a fake credit report prepared by Equifax. The affidavits

were introduced solely for the purposes of the preliminary injunction and ap-

parently were not introduced at the hearing on the merits.

A-10

the United States. The Superior Court Justice also adjudicated

that particular prohibitions contained in Section 1321 were so

vague that they could not meet the “‘due process of law” gua-

ranty of the Fourteenth Amendment.

In accordance with his determinations, the Justice perma-

nently enjoined the defendant Attorney General from enforcing

those provisions of the Maine Act adjudicated unconstitutional.

The Justice either rejected, or made no decision regarding, other

constitutional challenges asserted by plaintiff: challenges predi-

cated on the due process of law, commerce clause, supremacy

clause, and equal protection of the laws provisions of the federal

Constitution.

From the judgment entered embodying the conclusions and

actions of the Superior Court Justice, defendant has appealed to

this Court. In addition, as we stated earlier, plaintiffs have

taken a cross appeal in which they attack as erroneous the Supe-

rior Court’s determination of, or omission to decide, the various

other constitutional issues raised.

II. THE FIRST-FOURTEENTH AMENDMENT

PROTECTION OF SPEECH ISSUES.

II-A. Further Details of the Decision

of the Superior Court.

The Superior Court adjudicated originally enacted, and sub-

sequently amended, Sections 1314 and 1321 of the Maine Act

unconstitutional as an unwarranted abridgment of protections

afforded commercial speech by the First-Fourteenth Amend-

ments to the Constitution of the United States. By cross appeal

the plaintiffs contend that the Court was wrong in failing to

decide that Section 1313 also abridges constitutionally pro-

tected commercial speech.

In holding Section 1321 violative of the constitutional protec-

tion afforded commercial speech, the Superior Court Justice,

without distinguishing among its various subsections, stated:

‘“‘where Section 1321 prohibits the reporting of certain

broad categories of information in any circumstances,

A-11

even with the consent of the consumer involved, the

free flow of accurate public record information has

been unlawfully restricted.”

The adjudication is thus unclear. Did the Justice conclude that

all the parts of Section 1321 that purported to exclude whole ca-

tegories of information are, as such, direct and unlawful restric-

tions of protected commercial speech even if the category of

information excluded does not pertain to public record informa-

tion; or did he decide, rather, that the entire Section 1321

scheme intrudes too extensively upon constitutionally protected

speech by prohibiting the communication even of information

contained in public records?

We interpret the Justice’s decision as follows. It invalidated

Section 1321(1), the portion of Section 1321(2) pertaining to ir-

relevant information, the portion of Section 1321(3) directed

toward expungement of irrelevant information, and Section

1321(4) (A). The ground of invalidation was that those provi-

sions impose unwarranted direct restrictions upon constitution-

ally protected commercial speech.

II-B. The Nature and Scope of Our Appellate Review.

Before we address the merits of the contentions of the respec-

tive parties as to constitutionally protected commercial speech,

we must first clarify several factors bearing upon the nature,

and scope, of our appellate scrutiny of the issues raised.

We emphasize, first, that our appellate analysis will be strictly

confined within the particular framework fixed by all of the par-

ties, as well as by the adjudication of the Superior Court. One

bound of that framework is that the mode of speech regulated

by the Maine Act is commercial speech. Our appellate review

thus proceeds on the basis that in this particular case a ground

rule has been estabished confining our analysis to the First-

Fourteenth Amendment protection of commercial speech. See

Central Hudson Gas & Electric Corp. v. Public Service Commis-

sion of New York, U.S. , 48 U.S.L.W. 4783, 4784, n. 5

(June 17, 1980). For this reason, our decision of this case neither

States nor intimates any opinion whatever regarding whether all

the parties and the Superior Court were correct in classifying as

A-12

commercial speech any, or all, of the modes of speech the Maine

Act regulates.

Second, we regard Sections 1314 and 1321, the particular stat-

utes held by the Superior Court to be violative of the First-

Fourteenth Amendments, as direct restrictions upon speech

based upon the content of that speech; we do not look upon

them as mere time, place, or manner restrictions. See Consoli-

dated Edison Co. of New York, Inc. v. Public Service Commission

of New York, US. , 48 U.S.L.W. 4776, 4777 (June 17,

1980); Virginia State Board of Pharmacy v. Virginia Citizens

Consumer Council, Inc., 425 U.S. 748, 771, 96 S.Ct. 1817, 48

L.Ed.2d 346 (1976); Grayned v. City of Rockford, 408 U.S. 104,

115-16, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972). The analysis will

be somewhat extended to establish this point in relation to the

restraint imposed by Section 1314(1), particularly as it affects

the business of the plaintiff Equifax. Without need of extended

discussion, however, we find it plain that Section 1321 puts a

direct content-based restraint on speech. It prohibits outright

the preparation, use, or reporting of specifically defined catego-

ries of information: in (1) (A) information “‘[rJelative to. . .

race, religion, color, ancestry, ethnic origin,’ and so forth, and

in (1) (B) information “‘[rjelative to an arrest or criminal

charge’’; in (2) information “‘not relevant to the purpose for

which it is sought”; in (4) certain more particularly delineated

information. All of these provisions of Section 1321 prohibit the

reporting of the information solely because of the nature of its

content.

In fuller elucidation of the nature of the restraint imposed by

Section 1314(1), it might appear at first blush that its require-

ment that a user obtain prior written authorization from a con-

sumer before procuring an investigative consumer report has

only a remote relationship to the commercial speech of Equifax,

which is a supplier of consumer reports. On the surface, the re-

quirement seems to burden, or inconvenience, users rather than

suppliers. Were this indeed the only practical effect of the stat-

ute, we would be reluctant to adjudicate the constitutional chal-

lenge being made here by a supplier — particularly in light of the

United States Supreme Court’s warnings that the full-blown

“overbreadth” approach applied to other modes of speech may

A-13

not be applicable to commercial speech. As the Supreme Court

stated most recently in Central Hudson Gas & Electric Corp. v.

Public Service Commission of New York, supra, in distinguishing

the “‘overbreadth” doctrine from the requirement that restric-

tions on commercial speech be “narrowly drawn”’:

“The .. . [overbreadth doctrine] permits the invalida-

tion or regulations on First Amendment grounds

even when the litigant challenging the regulation has

engaged in no constitutionally protected activity... .

The overbreadth doctrine derives from the recogni-

tion that unconstitutional restriction of expression

may deter protected speech by parties not before the

court and thereby escape judicial review. . . . This re-

straint is less likely where the expression is linked to

‘commercial well-being’ and therefore is not easily de-

terred by ‘overbroad regulation.’ ” /d., n. 8.

See also Bates v. State Bar of Arizona, 433 U.S. 350, 379-82, 97

S.Ct. 2691, 53 L.Ed.2d 810 (1977); Virginia Pharmacy Board,

supra, 425 U.S. at 771, n. 24; Friedman v. Rogers, 440 U.S. 1. 10-

11, n. 9, 99 S.Ct. 887, 59 L.Ed.2d 100 (1979); Ohralik v. Ohio

State Bar Association, 436 U.S. 447, 462, n. 20, 98 S.Ct. 1912, 56

L.Ed.2d 444 (1978).

However, because of what the instant record shows is the

effect of Section 1314(1) on the business of Equifax, we think it

sufficiently evident that the speech restraints it imposes are not

remote as against Equifax. Equifax operations in Maine are

part of a nationwide consumer reporting enterprise. The record

discloses that a substantial volume of Equifax’s business in

Maine involves users not located in Maine. Plaintiff Paul

Weeks, manager of the office maintained by Equifax in the

Portland area, testified that

“the bulk of our reports do go to customers out of the

State of Maine. Most of our customers are domiciled

in other states, our major life companies, major cas-

ualty companies, all types of customers.”

He further testified that 25 to 30 percent of the reports made

each year relate to non-residents of Maine. Whereas Maine

users of consumer reports would be subject to the requirement

A-14

of prior consumer consent, out-of-state users may not be thus

subject to such a requirement under their own state law. If an

out-of-state user were not subject to such a restriction, and or-

dered either the preparation and transmission of a report or the

communication of information already on file and ready to be

reported by the consumer reporting agency, Equifax would be

unable to respond unless and until it had first required the user

to supply the requisite written consent. If Equifax did not do

this, being a Maine consumer reporting service, it would be sub-

ject to potential criminal penalties under Section 1326 of the

Maine Act. The restraint could therefore translate into costly

delay, and even a loss of business; indeed, the record reflects

that after the Maine Act became effective, Equifax incurred

some loss of business that was related to the stringency of the

Act’s requirements.

As brought in play in this case, then, the prior consumer con-

sent requirement of Section 1314(1) impairs the ability of Equi-

fax to respond effectively and promptly to requests from out-of-

state users of reports. So viewed, Section 1314(1) operates as at

least a prior restraint® and at most a total restraint on commer-

cial speech of Equifax that may qualify for protection under the

First-Fourteenth Amendments. Cf. Smith v. Daily Mail Pub-

‘There has been some suggestion that the doctrine of prior restraint may be in-

applicable to the commercial speech area. Virginia Pharmacy Board stated that

the “greater objectivity and hardiness” of commercial expression may permit

more exacting regulation, and “may also make inapplicable the prohibition

against prior restraints.” (emphasis added) /d. at 771, n. 24. See also Friedman

v. Rogers, supra, 440 U.S. at 10-11, n. 9. However, we interpret this statement

to signify that the Supreme Court of the United States is manifesting a degree

of caution in the extent to which it carries over traditional First Amendment

protections to “this uncharted area” of commercial speech. See /d. at 10-11, n.

9 (““[w]hen dealing with restrictions on commercial speech we frame our deci-

sion narrowly. . .’’); Beneficial Corp. v. Federal Trade Commission, 542 F.2d

611, 620 (3rd Cir. 1976), cert. den. 430 U.S. 983 (1977). (The court “must start

from the premise that any prior restraint is suspect, and that a remedy, even

for deceptive advertising, can go no further than is necessary for the elimina-

tion of the deception.”) We surmise, therefore, that the applicability of the

doctrine of prior restraint to commercial speech will develop on a case by case

basis, with due consideration being given to all the factors that bear upon the

analysis of the necessity of a particular regulation as a direct advancement of

substantial governmental interests.

A-15

lishing Co., 443 U.S. 97, 99 S.Ct. __, 61 L.Ed.2d 399 (1979)

(law criminalizing newspaper’s publication, without prior writ-

ten approval of juvenile court lawfully obtained, of truthful in-

formation concerning name of youth charged as a juvenile

offender held an impermissible prior restraint.)

Thus, Sections 1314 and 1321 are not time, place, or manner

restrictions. A “constitutionally permissible time, place, or

manner restriction may not be based upon either the content or

subject matter of speech.”’ Consolidated Edison Co., supra, ——

US. , at Neither Section 1314 nor Section 1321 oper-

ates totally apart from the content of the consumer report, and

under these sections it cannot be said with reasonable certainty

that “alternative channels for communication” are left open.

See Linmark Associates, Inc. v. Willingboro, 431 U.S. 85, 93, 97

S.Ct. 1614, 52 L.Ed.2d 155 (1977); Virginia Pharmacy Board,

supra, 425 U.S. at 771.

II-C. The Merits of the Speech Challenges Against

Particular Provisions of the Maine Act.

Having expressed these important preliminary points regard-

ing the framework of our appellate scrutiny in this case, we ad-

dress in more comprehensive detail the merits of the commercial

speech issues the parties and the Superior Court have formu-

lated for our appellate review and determination.

In its most recent decision concerning commercial speech,

Central Hudson Gas & Electric Corp. v. Public Service Commis-

sion of New York, supra, the Supreme Court of the United

States has traced through all of its cases decided since Virginia

State Board of Pharmacy v. Virginia Citizens Consumer Council,

Inc., 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976) the de-

veloping clarification of the nature and extent of the protection

of “commercial speech from unwarranted governmental regula-

tion, conferred by the ‘“‘First Amendment, as applied to the

States through the Fourteenth Amendment.”’ ____ U.S. ___., at

—__—. The Court summarized the results as follows:

“In commercial speech cases . . . a four-part analysis

has developed. At the outset, we must determine

whether the expression is protected by the First

Amendment. For commercial speech to come within

4-16

that provision, it at least must concern lawful activity

and not be misleading. Next, we ask whether the as-

serted governmental interest is substantial. If both in-

quiries yield positive answers, we must determine

whether the regulation directly advances the govern-

mental interest asserted, and whether it is not more

extensive than is necessary to serve that interest.”’ /d.

We therefore apply this four-part analysis to those provisions

of the Maine Act challenged, here, as being a governmental

regulation of commercial speech contravening First-Fourteenth

Amendment protections.

II-C-1. The Challenge to Section 1314 of the Maine Act.

The Superior Court Justice decided that the First-Fourteenth

Amendment protections afforded commercial speech were vio-

lated by the provisions in Section 1314(1):

“A person may not procure or cause to be prepared

an investigative consumer report on any consumer

unless:

‘**. . . That person has provided the consumer

with clear and conspicuous written notice of the

requested procurement or preparation and the

consumer has, in turn, given or signed written

authorization for each procurement or prepara-

are ee

The “investigative consumer report” for which the user must ar-

range to have this prior written consent of the consumer is de-

fined in Section 1312(7) as

‘“‘a consumer report or portion thereof which includes

information bearing on a consumer’s character, gen-

eral reputation, personal characteristics or mode of

living which is obtained through personal interviews

with neighbors, friends or associates of the consumer

or with others with whom he is acquainted or who

may have knowledge concerning any such items of in-

formation or by other means.”

A-17

We have already explained that despite indirectness in the

manner in which Section 1314(1) restrains commercial speech

by Equifax (the indirectness being that‘the restraint is effectu-

ated through conduct required of users and consumers), the re-

straint is nevertheless actual, substantial and content-based.

Manifestly applicable, then, is the “four-part analysis” delin-

eated in Central Hudson Gas & Electric Corp., supra.

We first inquire whether the commercial speech thus re-

strained by Section 1314(1) is such commercial speech as is con-

stitutionally protected. Central Hudson Gas & Electric, supra,

establishes that commercial speech which (1) is “more likely to

deceive the public than to inform it,” or (2) is “related to illegal

activity”’ is excluded from First-Fourteenth Amendment protec-

tion. /d. at __.

Neither Section 1314(1) itself nor the elaboration of it pro-

vided by the definition of “investigative consumer report”’ says

anything that refers in terms to deceptive or misleadingly inac-

curate information, or that purports to confine the applicability

of the restraint imposed to the reporting of such information.

Yet, the defendant Attorney General contends the commercial

speech regulated by Section 1314(1) must be held excluded from

First-Fourteenth Amendment protections, as being “more

likely to deceive . . . than to inform.” Basically, the Attorney

General’s position is that by their very nature as aggregates of

information relating to the personal characteristics of a con-

sumer that are collected from interviews with third persons and

by other means inviting highly subjective judgments, investiga-

tive reports will most of the time, if not always, be inaccurate

and misleading and, therefore, should not be treated as consti-

tutionally protected commercial speech.

We reject this argument. We cannot “presume” that inevitab-

ly, or generally, investigative consumer reports are deceptive or

misleading, especially since the particular record before us re-

futes any such “presumption” by its affirmative showing, unre-

futed, that material inaccuracies turn up in only a‘small number

of investigative consumer reports.°

*Mr. Ronald Marshall, Vice-President in charge of health and disability un-

derwriting for Paul Revere Life Insurance Company, testified that less than

one percent of investigative consumer reports used by his company contain er-

A-18

We do not overlook that in Ohralik v. Chio State Bar Associa-

tion, supra, the Supreme Court of the United States was willing,

without actual evidentiary support in that case, simply on the

basis of the general literature and Federal Trade Commission

reports to regard the activity there prohibited, i.e., in-person so-

licitation by an attorney, as “inherently conducive to overreach- —

ing and other forms of misconduct.” See Ohralik, supra, 436

U.S. at 459, n. 23. Ohralik, however, involved conduct specially

within the knowledge and expertise of the Court itself: the be-

havior of lawyers and the effects thereof on clients.

As to the particular information at issue in the attack on Sec-

tion 1314(1), we conclude that the general body of secondary lit-

erature, or even the congressional legislative history of the

Federal Act enacted in 1970, is not too helpful. This informa-

tion relates to the time when the consumer reporting industry

was unregulated. With the advent of tighter federal regulations

in regard to reporting methodology, as distinguished from the

informational content of reports, — such as requirements for

notification of a report’s preparation, disclosure of the sub-

stance of the report upon request, imposition of strict require-

ments as to record keeping and filing, and imposition of civil

and criminal liability for failure to comply with these regula-

tions, — we cannot “presume”’ that the abuses present before

and during the early 1970’s still persist today, either nationally

or in the State of Maine.

roneous information. Gaylord Paine, Senior Vice-President of Connecticut

Mutual Life Insurance Company testified that based on verification checks

made by reference to other sources, his company found that it rarely receives

investigative consumer reports containing inaccuracies. Furthermore, other

testimony showed that disgruntled consumers who are refused insurance or

charged higher premium rates usually complain or inquire, and that the pro-

cess of verifying the information can reveal errors or substantiate the reported

information. Evidence also indicated that out of 140,000 reports issued in the

period from June 1974 to December 1977 in Maine, 61 consumers challenged

the accuracy of the reports. Of these 61 challenges, Equifax reinvestigated 45

cases, with the results that 16 were found accurate and 29 were found to re-

quire changes in the information, — changes in items such as estimated mile-

age in driving to work, earned income, number of apartments in a building, or

degree of alcohol use. The record also revealed that with respect to those com-

panies whose representatives testified, approximately 95% of the applicants re-

ceive insurance at the standard rating, — a percentage tending to show that

prejudicially inaccurate reporting is not extensive.

A-19

In applying the first step, then, of the Central Hudson four-

step analysis, we conclude that constitutionally protected com-

mercial speech'® has been subjected under Section 1314(1) to

content-based governmental restraint.

We proceed, then, to the second step: whether the restraint

thus imposed by Section 1314(1) furthers a governmental inter-

est substantial in nature. As Central Hudson says: “The State

must assert a substantial interest to be achieved by restrictions

on commercial speech.” /d., at —_.

Defendant Attorney General maintains that the governmen-

tal interest sought to be achieved by Section 1314(1) is the pro-

tection of the citizenry’s enjoyment of “privacy.”’ That this is a

substantial governmental interest is illustrated, says the Attor-

ney General, by the constitutional and tort law protections af-

forded “privacy.”

One fundamental lesson we learn, however, from the consti-

tutional and tort law approaches to the protection of “privacy”

is that as it is used in common parlance, privacy is an elusive

concept. Hence, to avoid confusion, indeed error, in analysis we

must recognize that constitutional and tort law protects only

particular facets of what the average person may think of as a

“right to privacy.”

For example, in those cases where government is acting in a

manner claimed by a person to be violative of his “‘privacy’’, so

that a constitutional claim can be made because of the presence

of governmental action, the Supreme Court of the United States

has emphasized that only particular “‘zones” of privacy have

constitutional protection. See Paul v. Davis, 424 U.S. 693, 712-

13, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976). In Whalen v. Roe, 429

U.S. 589, 97 S.Ct. 869, 51 L.Ed.2d 64 (1977) the “zones” of pri-

vacy constitutionally protected, because deemed fundamental

or substantial, were classified as comprising generally: (1) mat-

ters so personally intimate or worthy of secrecy that govern-

ment should be precluded from making, or requiring, public

disclosure of them and (2) the sphere of decision-making in inti-

‘The Attorney General has made no contention that the commercial speech

regulated by Section 1314(1) lacks constitutional protection as being “related

to illegal activity.”

A-20

mate personal matters of such importance as those “relating to

marriage, procreation, contraception, family relationships, and

child rearing and education.” /d., at 600, n. 26; see also Paul v.

Davis, supra, at 713.

Similarly, in the law of torts only particular ‘“‘areas”’ of interest

comprehended within what is commonly denominated “priva-

cy” have been marked out as legally protected. These “areas”

are: (1) the interest in physical or mental solitude or seclusion,

as protected from an intrusion thereon which is intentional and

yields a highly offensive result; (2) the interest that certain kinds

of facts about one’s intimate person, or secrets, shall not be

given public disclosure; (3) the interest of a person not to be fal-

sely regarded by the public, an interest which is protected ag-

ainst conduct that depicts a person to the public in a false light;

and (4) the interest of a person in his name or likeness, which is

protected against appropriation for another’s benefit or advan-

tage. See Nelson ». Maine Times, Me., 373 A.2d 1221, 1223

(1977); Estate of Berthiaume v. Pratt, Me., 365 A.2d 792, 794

(1976); Restatement (Second), Torts § 652A-E.

It would appear, then, that the above delineated particular

““zones”’ or “‘areas’’, as intruded upon by the particular conduct

described, represent the extent of a governmental interest in

protecting “privacy” that may fairly be taken as being substan-

tial.

As we have already explained, the regulatory thrust of Sec-

tion 1314(1) is concentrated upon investigative consumer re-

ports. By definition such reports provide

“information bearing on a consumer’s character, gen-

eral reputation, personal characteristics or mode of

living . . . obtained through personal interviews with

neighbors, friends or associates of the consumer or

with others with whom he is acquainted or who may

have knowledge concerning any such items of infor-

mation or by other means.” 10 M.R.S.A. § 1312(7).

From this definition it is plain to us that the restraints imposed

by Section 1314(1) safeguard only minimally and tangentially, if

at all, those particular “‘zones’’ or ‘“‘areas’’ of “privacy” (from

those particular kinds of intrusions) that, as illustrated by con-

A-21

stitutional doctrine and the law of torts, generate a governmen-

tal interest of protection that may fairly be deemed substantial.

This being so, Section 1314(1) must be held unconstitutional be-

cause either: (1) the restraint it imposes really does not at all fur-

ther a substantial governmental interest or (2) if we

acknowledge that the restraint may have a degree of relation to

a substantial governmental interest, under the third and fourth

steps of the Central Hudson four-step analysis the restraint does

not directly advance that substantial interest and is more exten-

sive than is necessary to serve it.

II-C-2. The Attack on Section 1321.

The Superior Court Justice decided that Section 1321 as it

read in “‘the original and amended [Maine] [AJcts [is] . . un-

constitutional as violative of the First Amendment.”

The original version of Section 1321 contained, among

others, the following categories of prohibited information: “‘un-

corroborated hearsay”, ‘“‘personal life style’, and ‘“‘philoso-

phy.”'' The 1978 amendment deleted these categories. It also

made changes pertinent to our present inquiry in other parts of

Section 1321, as follows: in the Section 1321(1) prohibition of

information “not reasonably relevant to the purpose for which

it is sought”; in the Section 1321(2) prohibition against a con-

sumer reporting agency’s or a merchant’s collection, evaluation,

preparation, use or reporting of information which is “‘obso-

lete”’, or which either the agency or the merchant has “reason to

"10 M.R.S.A. § 1321(1) (Supp. 1977-78) (repealed) provided:

“Information relative to criminal charges. Neither a consumer re-

porting agency nor a merchant shall prepare, use or report infor-

mation which is not reasonably relevant to the purpose for which

it is sought.

“Neither a consumer reporting agency nor a merchant shall col-

lect, evaluate, prepare, use or report information relative to an

arrest or a criminal charge unless there has been a criminal con-

viction for such offense, or information based on uncorroborated

hearsay, or information about a consumer’s race, religion, color,

ancestry, ethnic origin, personal life style, philosophy or political

affiliation, except to the extent required by governmentally im-

posed record keeping requirements.” (emphasis added)

A-22

know is inaccurate or irrelevant’’; and in the Section 1321(3) re-

quirement that consumer reporting agencies and merchants

follow procedures to exclude inaccurate and irrelevant informa-

tion,'?

'2By the amendment in 1978, the full text of 10 M.R.S.A. § 1321 (Supp. 1979-

80) was changed to read:

“§ 1321. Prohibited information, accuracy, relevancy and obso-

lescence of information in reports

“1. Reporting agencies. No consumer reporting agency shall

prepare, use or report information:

“A. Relative to a consumer’s race; religion, color,

ancestry, ethnic origin, sexual preference or orienta-

tion, political affiliation or political beliefs, except to

the extent required by governmentally imposed

record-keeping requirements or to the extent nec-

essary to prepare, use or report information relative to

an arrest or criminal charge, as provided in paragraph

B, or a consumer’s marital status; or

“B. Relative to an arrest or a criminal charge or ad-

mission of wrong doing in connection with a detention

pursuant to Title 17, section 3521, unless there has

been a criminal conviction for that offense or unless

the charge is still pending, and, additionally, when the

information reflects sexual preference or orientation,

unless the conduct which is the basis of the arrest or

criminal charge constitutes an offense under the provi-

sions of the Maine Criminal Code or comparable law

of another jurisdiction.

“2. Irrelevant or inaccurate information. A consumer report-

__ ing agency shall not prepare, use of report information which it has

reason to believe is inaccurate or not relevant to the purpose for

which it is sought.

“3. Procedures to insure report accuracy. A consumer report-

ing agency shall adopt and follow reasonable procedures designed

to assure maximum possible accuracy of the information concern-

ing the individual to whom the report relates and exclude from its

files inaccurate information, information which cannot be verified,

and information which it has. . . reason to believe is not relevant to

the purpose for which it is sought.

“4, Items prohibited in reports

“A. Except as authorized under paragraph B, no

consumer reporting agency may make any consumer

A-23

Defendant Attorney General makes no contention on appeal

that the Superior Court Justice committed error by deciding

that parts of the original version of Section 1321 unduly restrict-

ed constitutionally protected commercial speech. Regardless of

report or investigative consumer report containing

any of the following items of information:

“(1) Bankruptcies which, from date of adjudi-

cation of the most recent bankruptcy, antedate

the report by more than 14 years;

*(2) Suits and judgments which from date of

entry, antedate the report by more than 7 years

or until the governing statute of limitations has

expired, whichever is the longer period;

*(3) Paid tax liens which, from the date of

payment, antedate the report by more than 7

years;

*(4) Accounts placed for collection or charged

to profit and loss which antedate the report by

more than 7 years;

*(5) Records of arrest or of conviction of

crime which, from date of disposition, release or

parole, antedate the report by more than 7

years;

‘“(6) Information regarding drug or alcoholic

addiction unless such information is provided

by a licensed practicing physician and the infor-

mation relating to such addictions does not an-

tedate the consumer report or investigative

consumer report by more than 7 years;

(7) Information relating to past confinement

in a mental institution when the date of last con-

finement antedates the report by more than 7

years; and

*(8) Any other adverse item of information

which antedates the report by more than 7

years.

“B. The provisions of paragraph A are not applica-

ble in the case of any consumer credit report to be

used in connection with: ,

(1) A credit transaction involving, or which

may reasonably be expected to involve, a princi-

pal amount of $50,000 or more;

A-24

whether this omission may suggest a concession by defendant

on that specific issue (and in all reasonable likelihood it does

not),'? we will nevertheless evaluate the correctness of the Jus-

tice’s conclusions regarding those now repealed categories.

We are induced to do this by the nature of plaintiffs’ constitu-

tional challenge and the kinds of interests involved in this case.

Plaintiffs contend that on their face the repealed parts of Sec-

tion 1321 transgressed the constitutional protections afforded

speech, as having restricted or chilled the compilation and re-

porting of information and also as having subjected consumer

reporting agencies to potential civil liability and criminal penal-

ties in the event they might have reported prohibited informa-

tion at any time after the Maine Act went into effect on October

24, 1977. It may well be that as to the first ground of this facial

attack, plaintiffs are no longer subject to the direct restrictions,

or any chilling effects, arising from the repealed categories of

prohibited information. Yet, as to the second ground, under

*(2) The underwriting of life insurance involv-

ing, or which may reasonably be expected to in-

volve, a face amount of $50,000 or more except

that the provisions of paragraph A, subpara-

graphs 6 and 7 are not applicable in connection

with the underwriting of life insurance involv-

ing, or which may reasonably be expected to in-

volve, a face amount of $25,000 or more;

*(2-A) The underwriting of disability income

insurance involving, or which reasonably may

be expected to involve, an indemnity for total

disability of $1,000 per month or more; or

*(3) The employment of any individual at an

annual salary which equals, or which may rea-

sonably be expected to equal, $20,000 or more.

“5. Listing of denial of credit prohibited in certain situa-

tion. No consumer reporting agency shall issue a consumer

report which lists a person as having been denied credit if the sole

reason for such denial is lack of sufficient information to grant

credit, unless the report states that the denial was for such reason.”

''We infer that defendant intended no such concession because he has so vig-

orously attacked on grounds of mootness the Superior Court’s adjudication

holding the repealed categories too vague to meet the Fourteenth Amendment

due process of law requirements.

A-25

Sections 1322 and 1323 of the Maine Act which condition civil

liability upon a failure to comply with the Act, plaintiffs could

be subjected to future suits based upon their having previously

reported information prohibited by the repealed categories.'‘

Since plaintiffs’ challenge is facial in nature and pertains to por-

tions of the statutes under which, despite their having been re-

pealed, plaintiffs may still be subject to suit, and since we must

in any event adjudicate the general validity of large portions of

the statute that closely resemble the repealed sections in form

and substance, we think we have responsibility to review the Su-

perior Court Justice’s decision in all of the respects that he

found unconstitutional abridgments of commercial speech.

The text of Section 1321 makes evident that the bulk of its re-

gulation is directed to the content of speech which, even as com-

mercial speech, is constitutionally protected insofar as it is

speech that is far more likely to be informative than deceptive.

Section 1321(A) and Section 1321(B) forbid the inclusion of cer-

tain types of information, such as race, political affiliation,

criminal record, regardless of their truth or falsity; Section

1321(4) likewise prohibits the reporting of truthful, accurate

public record information.

Potentially, too, if not plainly so, the provisions in Sections

1321(2) and 1321(3) regarding the exclusion of “‘irrelevant”’ in-

formation may infringe upon constitutionally protected com-

mercial speech, since the “irrelevance” of information does not

inevitably, or with strong likelihood, cause it to be deceptive or

misleading.

'*We recognize that Section 1324 of the original and amended Maine Act im-

poses a general two year statute of limitations upon actions pertaining to any

liability created under the Maine Act, and that the amendments to the Act

took effect 2 years ago, on July 6, 1978. An exception to the two year period of

limitation, however, keeps alive the possibility that plaintiffs could be sued

under the original version of Section 1321(1). This exception applies where the

consumer reporting agency, has

“materially and willfully misrepresented any information re-

quired under this Title to be disclosed to an individual and the in-

formation so misrepresented is material to the establishment of

the [agency’s] liability.” 10 M.R.S.A. § 1324 (Supp. 1979-80).

In such case, the two year period of limitation commences at the time the indi-

vidual discovers the misrepresentations.

A-26

On the other hand, to the extent that portions of Section 1321

require information to be accurate, as in Sections 1321(2) and

1321(3), and verified, as in Section 1321(3), those provisions in

terms pertain to the State’s interest that commercial speech be

neither deceptive nor misleading. Thus, without need for further

discussion of these portions of Sections 1321(2) and 1321(3)

concerned with the accuracy and truthfulness of information,

we decide that, within the commercial speech framework in

which our judicial review is proceeding, those provisions are

valid regulations, as being precisely directed to such commercial

speech as is excluded from constitutional protection. Central

Hudson, supra.

To answer the question whether other particular restrictions

in Section 1321 should aiso be upheld, on the ground that they

regulate commercial speech that is excluded from constitutional

protection as “relating to illegal activity’, Central Hudson,

supra, we must analyze more closely both the particular catego-

ries of prohibited information delineated in Section 1321(1) (A)

and the scope and meaning of “unlawful” or “‘illegal’’ activity.

Except for several categories of prohibited information in

Section 1321(1) (A), all the other types of information that cur-

rent Section 1321 prohibits consumer reporting agencies from in-

cluding in their reports the current Maine Act nonetheless

permits the users of reports to take into account in making their

decisions about consumers in particular transactions. However,

as the defendant Attorney General points out, reliance by cer-

tain users (decision makers) upon certain categories of informa-

tion is made independently illegal by other statutes. For

example, the Maine Human Rights Act prohibits discrimina-

tion based solely upon age, sex, race, religion, color, physical or

mental handicap, ancestry, or national origin in the specific

areas of credit extension, employment, housing and public ac-

commodations.

The contention is, therefore, that the communication of in-

formation prohibited by Section 1321(1) (A) is a regulation of

commercial speech lacking constitutional protection because it

“relates to illegal activity” insofar as users to whom the speech

is directed may use the information communicated as a basis for

illegal discrimination.

A-27

We reject any such rationale to justify the suppression of

commercial speech effectuated by Section 1321(1) (A). We reach

this conclusion through analysis of Pittsburgh Press Company v.

Pittsburgh Commission on Human Relations, 413 U.S. 376, 93

S.Ct. 2553, 37 L.Ed.2d 669 (1973), (hereinafter ‘‘Press I’’), as it

was distinguished by the Pennsylvania Supreme Court in Com-

monwealth of Pennsylvania v. Pittsburgh Press Company, 483 Pa.

314, 396 A.2d 1187 (1979), cert. den. _. U.S. —__— (19_),

hereinafter ‘‘Press II’’).

In Press I the Supreme Court of the United States decided

that because sex discrimination in employment was an illegal

commercial activity, as defined by an independent section of the

City of Pittsburgh’s Human Relation Ordinance, the newspaper

could be constitutionally prohibited from publishing an adver-

tisement placed by an employer seeking applications for em-

ployment by reference to gender. In Press I] the Pennsylvania

Human Relations Commission challenged the publication by

the Pittsburgh Press of “situation wanted” advertisements in

which job-seekers stated their qualities in hopes of securing em-

ployment. These advertisements occasionally contained refer-

ences to the race, color, religion, age and sex of the person

seeking employment. The Commission argued that since dis-

crimination on the basis of race, color, creed, ancestry, age, sex,

or national origin was unlawful under the Pennsylvania Human

Relations Act, the publication of “situation wanted” advertise-

ments containing the above information was illegal activity, as

violative of a provision of the Human Relations Act forbidding

the aiding and abetting of unlawful discrimination. In support

of this argument, the Commission cited Press /.

The Pennsylvania Supreme Court rejected the Commission’s

contention. That court saw a critical distinction between Press I

and Press II. In Press I the newspaper was placing the prospec-

tive employer’s advertisements in columns segregated by gender,

whereas in Press I] the newspaper published the prospective em-

ployee’s advertisements. Thus, in Press ] the newspaper adver-

tising, as placed by the employer, was directly involved in the

employer’s illegal activity of hiring by reference to gender. In

Press II, however, the newspaper’s publishing of advertising

placed by job-seekers could be deemed an aiding and abetting of

A-28

illegally discriminatory hiring by an employer only if it be as-

sumed that the mere existence of such advertising by job-seekers

tended to cause employers to make illegally discriminatory

hiring decisions and, therefore, that prohibiting such advertis-

ing would reduce unlawful discrimination in hiring. The Pen-

nsylvania Supreme Court concuded that this assumption was

“too speculative to justify [the] direct restriction on the adver-

tiser’s freedom of expression.”’ /d., at 1190.'°

We think the analysis in Press I] is correct and that its rea-

soning should control the case at bar. We are not persuaded

that there is a distinction, here, because evidence shows that

users of reports meet periodically with Equifax to discuss the

general informational content of consumer reports. Such con-

nection between Equifax and the users of its reports does not

approach the symbiotic relation between the newspaper and the

advertising employers in Press J, where the employer in every

instance dictated to the newspaper the content of the adveriise-

ment. In the present case, the evidence reveals that users are

consulted only occasionally by Equifax’s “‘marketing depart-

ment” regarding the general scope of the information desired.

Unlike the situation in Press J, nothing suggests here that

users have specifically requested information falling with the

narrow limits of the independently established criteria of illegal

discrimination. The user’s feedback relates, as far as can be dis-

cerned from the record, to general categories tailored closely to

the purpose for which the report is sought. For example, life in-

surers request standardized types of information relating to oc-

cupation, financial status, health, and general stability;

automobile insurers expect information relating to users of the

automobile, driving record and habits and so forth; employers

desire information relevant to the applicant’s previous work ex-

perience, reliability, and so forth. Moreover, under its own in-

ternal policies, Equifax prohibits the inclusion in any report of

''This would be true particularly with respect to facts that would be readily ap-

parent to a prospective employer from the employment application or person-

al interview: age, sex, race, color and so forth. As to such facts, the regulation

frustrated the advertiser's freedom of expression since the employer would be

likely to know in any event of the information that was prohibited from being

part of an advertisement.

A-29

information falling within two of the “unlawful” criteria, i.e.,

race and religion, except in those extremely rare circumstances

where that information may have iegitimate bearing on the deci-

sion to be made by a user.

We therefore conclude that the provisions in Section 1321(1)

(A) cannot be sustained on the ground that the commercial

speech it suppresses is excluded from constitutional protection

as commercial speech “relating to illegal activity.” In itself, the

act of reporting the information is not illegal. Moreover, that a

user merely becomes aware of the factors addressed by Section

1321(1) (A) is not illegal. It is only when the user bases a dis-

criminatory decision on such factors that illegal activity occurs,

and nothing in evidence shows that users are generally suscepti-

ble to improper influence merely by becoming aware of them.

Hence, there is no fair basis for the “presumption” the de-

fendant Attorney General seems to advocate, that a user’s

awareness of the factors delineated in Section 1321(1) (A) as the

criteria for prohibiting a flow of information is the equivalent of

illegal decision-making by the user.

We turn, then, to the other three steps in the Central Hudson

“four-part analysis”: whether the governmental interests as-

serted in support of the prohibition of constitutionally pro-

tected commercial speech required by Section 1321 are

substantial, and, if so, whether the prohibitions directly advance

the asserted state interests without being more extensive than

necessary to serve them. For purposes of convenience and brevi-

ty, we discuss in essentially a unitary way these analytically sep-

arate inquiries that in the present context are closely

interwoven.

The regulatory approach in Section 1321 manifests a govern-

mental conception that in order to prevent intrusions upon

“privacy” by unlawful discrimination and improperiy in-

fluenced decision-making it is necessary to exclude entirely var-

ious items of information from the consideration of users and,

therefore, to require the purging of such data from consumer

agency reports.

The record in this case fails to demonstrate that such blanket

exclusion from consumer agency reports of the kinds of infor-

A-30

mation under scrutiny will directly advance the asserted state in-

terests.

Except for those classes of information that other statutes

make it independently illegal for users to rely upon in reaching

particular kinds of decisions, Section 1321(1) (A) requires the

exclusion from consumer reports of information users can law-

fully make the basis of their decisions.'* It would seem, too, that

despite the prohibitions of Section 1321(1) (A), users can readily

obtain such information through sources other than consumer

agency reports.'’ Even on the assumption that recipient users

may have no other ready access to the prohibited information,

we cannot “presume”’ that their acquiring it from consumer re-

porting agencies would inevitably, or most likely, cause them to

be prejudiced in their making of decisions. The evidence in the

record before us is to the contrary.'®

'*Although the repealed version of Section 1321 prohibited both the reporting

of such information by the consumer reporting agency and the use of such in-

formation in economic decision making, the current Section 1321 omitted ref-

erence to the use of the information, thereby making it lawful unless otherwise

prohibited, and focused exclusively upon the reporting of the information.

"Evidence adduced in this case showed that users, particularly insurers, have

multiple sources of information, including a personal application form, per-

sonal interview and an agent’s evaluation. Prohibited information may come

to ilie user’s attention through such an application, by an independently solic-

ited doctor’s report, or as a result of a personal interview. See Pittsburgh Press

II, supra. An insurance agent would not be required to obtain a consumer's

prior written authorization in order to report information bearing upon that

consumer’s general reputation, or personal character, or mode of living. This

is particularly true in regard to the public record information that is made a

prohibited category under Section 1321(4) (A).

''The evidence shows that insurance underwriters frequently are exposed to a

range of information about a particular applicant that may or may not be rele-

vant. If such information is not relevant to the decision at hand, but includes

some of the prohibited facts, the information need not affect the judgment, for

example, of a trained underwriter whose principal concern is to assess the risk

that the applicant presents. Thus, Mr. Gaylord Paine, Senior Vice-President of

Connecticut Mutual Life Insurance Company and an expert in the field of un-

derwriting, testified that sexual preference or orientation alone may not be rel-

A-31

In this connection, we do not overlook that Section 1321 (4)

(A) is substantially identical to a corresponding provision in the

Federal Act. We therefore look to what appears in the Congres-

sional legislative history as potential support for the constitu-

tional validity of Section 1321(4) (A).

From that investigation we discern that even though Section

1321(4) (A) may further governmental interests that may be

deemed to be substantial, two factors lead to the conclusion that

Section 1321(4) (A) unduly abridges constitutionally protected

commercial speech. The first factor is that Congress enacted the

Federal Act in the early part of the 1970's, at a time when com-

mercial speech was afforded no constitutional protection what-

ever. Virginia Pharmacy Board, supra, the first case bringing

commercial speech within the protection of the First-Four-

teenth Amendments, was not decided until 1976. In particular,

consumer reports were then characterized as commercial speech

evant to an underwriter’s assessment of a particular individual risk but may be

considered important and relied upon if, in combination with other informa-

tion, it suggests violent or criminal tendencies. Similarly, political affiliation or

beliefs will usually also be irrelevant, and be disregarded by evaluating under-

writers, unless a particular application involves active participation in a vio-

lence-prone group, and in such case, depending upon the type of insurance

sought, it would be material to the determination of risk. Furthermore, the

record discloses that, generally, underwriters discovering adverse information

in a consumer report take steps as a matter of course to verify that information

by checking independent corroborating sources (such as medical reports on

the application form), or by requesting a supplemental consumer report. Not

only the accuracy of the reported information is checked by this procedure,

but additional facts about other aspects of the applicant may corroborate an

adverse inference drawn from the initial report. Lastly, cogent evidence of

record shows that only in a small percentage of cases has adverse information

in a consumer report caused an outright denial of the benefit sought. For ex-

ample, Frank Fowles, President of Maine Bonding & Casualty Company, for-

merly one of the largest customers in Maine of Equifax, testified (at the

November 1977 preliminary injunction proceeding) that:

“As far as rejections are concerned, I would say that a very, very

small percentage [of consumer reports cause an applicant to be

denied an insurance policy]; as far as determinations about the

classification of the policy leading to a need to have some adjust-

ment in the premium, a considerably higher proportion of the

policies would be in this latter category... ”

A-32

and, therefore, as commercial speech they were held to lack con-

stitutional protection. Now that it has been established that the

fact alone that speech may be commercial does not strip away

constitutional protection, Section 1321(4) (A) of the Maine Act,

and its Federal Act counterpart (15 U.S.C. § 1681c), must be

evaluated anew in accordance with different controlling prin-

ciples.

In this reassessment, requiring closer scrutiny of the govern-

mental restraints imposed on commercial speech, we find that

the Congressional legislative history fails to provide support for

the pivotal proposition underlying Section 1321(4) (A)—the as-

sumption that inevitably, or most probably, users of consumer

reports will be improperly influenced if such reports commu-

nicate to them the type of information that Section 1321(4) (A)

prohibits from inclusion in consumer reports.

The constitutional infirmity of Section 1321(4) arises, essenti-

ally, from its unduly broad sweep in going so far as to prohibit

the communication of truthful, accurate facts, even those in

public records, as a means of seeking to assure that decision

making by users will have a proper, not an improper, basis. This

governmental interest could have been adequately served had

the legislature intruded less extensively upon constitutionally

protected commercial speech by focusing on the decision-

making process itself. For example, the Maine Act could have

made it illegal for users to base their decisions on particular

kinds of information, or it could have required users to provide

specific justification for decisional action involving any type of

information deemed “‘suspect.”’ The resort to a blanket restric-

tion, or prohibition, of constitutionally protected commercial

speech thus violates the Central Hudson mandate that the regu-

latory scheme directly advance the asserted state interests and be

no more extensive than is necessary to serve them.

We now address specifically those portions of the original

and amended Section 1321 that purport to make “relevancy”

the criterion of a category of prohibited information. We have

under consideration those parts of Section 1321 we previously

mentioned at p. 28 and p. 32 of this opinion, as well as the por-

tion of amended Section 1323(2) providing for additional dam-

A-33

ages for each reported item of information that the agency has

“treason to believe was not relevant to the purpose for which it

was sought.”

The determination of what information is relevant in a partic-

ular instance may not be easy, or indeed possible, until all facts

from all sources have been assembled and analyzed. Insurance

underwriters who testified in the instant proceeding, for exam-

ple, recognized that the determination of relevancy in particular

circumstances may be a delicate or difficult determination. A

fortiori, consumer reporting agencies, which only collect and

report information, are even less able to differentiate in a large

percentage of cases the “relevant” from the “irrelevant” infor-

mation. Even the qualification added by the 1978 amendment—

that the consumer reporting agency must have “reason to be-

lieve” that the information is not relevant before it will be held

accountable for including it in a consumer report—is insuffi-

cient to overcome the unwarranted intrusion these provisions

effectuate against constitutionally protected commercial speech.

Although the chilling effect of the pre-1978 version has been re-

lieved somewhat by the amendment, the statute’s provision still

sweeps broadly by use of a generalized standard which, in the

context in which it is to operate, is difficult to apply. That a con-

sumer agency may have reason to believe that an item of infor-

mation might not be relevant does not establish that there is

irrelevance. Moreover, even if the information may be actually

irrelevant, a consumer report otherwise constitutionally pro-

tected as speech cannot be made to lose consitutional protection

solely because some of the information in it may be irrelevant

for the purposes at hand. The foundational premise upon which

such a purported suppression of speech could be warranted is

that users who receive irrelevant information must be deemed

incapable of dealing with it or of avoiding being adversely pre-

disposed toward a consumer applicant because of it. The record

before us does not permit such an assumption. Irrelevant infor-

mation does not equate with false, or misleading, information.

Neither can a “presumption” be supportable that the irrele-

vance of information makes it highly likely to be misleading, or

even negative. Thus, the regulation in Section 1321 that requires

a reporting agency to exclude from its reports information it has

A-34

reason to believe is not “relevant” to the purpose for which it

was sought infringes too sweepingly upon constitutionally pro-

tected commercial speech.

Finally, we comment specifically upon one aspect of the re-

pealed version of Section 1321 that we have not yet discussed.

Under the Maine Act as originally enacted Section 1321 prohib-

ited consumer reporting agencies from making and selling :e-

ports containing expressly identified categories of prohibited

information, and it also prohibited users from using reports

containing such information:

“Neither a consumer reporting agency nor a mer-

chant shall collect, evaluate, prepare, use or report...

information based on uncorroborated hearsay, or in-

formation about a consumer’s . . . personal life style,

philosophy ...” 10 M.R.S.A. § 1321(1) (Supp. 1977-

78)'° (repealed).

Thus, the prohibition of speech by the consumer reporting

agency was closely tailored to the prohibition against the use of

certain criteria by merchants. Such type of regulation tends to

go far beyond, if it touches at all, any of those “zones” of “‘pri-

vacy’’ that, as we discussed earlier, government may have a sub-

stantial interest in protecting. Information ‘‘about a consumer’s

personal life style’’ or “about a consumer’s philosophy” relates

to matters tending to be publicly known, as the definition of ‘‘in-

vestigative consumer report” confirms by referring to the

sources of such information as being “‘neighbors, friends, . . . as-

sociates... or... others with whom [the consumer] is acquaint-

ed or who may have knowledge concerning any such items of

information ...” In short, the regulation is not narrowly drawn

to ferret out only those parts that directly bear upon such par-

'°The other categories of prohibited information in the original version of Sec-

tion 1321—race, religion, ethnic origin, color, ancestry, and political affilia-

tion—were carried forward into the amended version. The only distinction

between the repealed and amended Section 1321 with respect to these other ca-

tegories is that under the original Section 1321 such categories were expressly

made unlawful criteria for all merchants, or users. Under the amended ver-

sion, which does not prohibit “merchants” from using such information, those

particular categories of information would be unlawful criteria only where so

declared by an independent statute, e.g., the Maine Human Rights Act.

A-35

ticular ‘‘areas” of “privacy” fairly deemed to make a claim for

governmental protection that is substantial, as illustrated by the

protections afforded constitutionally or by the law of torts.

We conclude, therefore, that the original version of Section

1321 is unconstitutional as an impermissible restriction upon

commercial speech protected under the First-Fourteenth

Amendments.

In summary, our decision is that the Superior Court Justice

correctly adjudicated that the following provisions of the Maine

Act transgress the protections afforded commercial speech by

the First-Fourteenth Amendments: original, and amended, Sec-

tions 1314(1) and 1321(1); those particular provisions in origi-

nal, and amended, Sections 1321(2) and (3) prohibiting the

inclusion in a consumer agency report, or retention in its file, of

information the reporting agency “thas. . . reason to believe is

not relevant to the purpose for which it is sought’’; original and

amended, Section 1321(4) (A). We order added to these the part

of amended Section 1323(2) which allows for the imposition of

additional damages for each “irrelevant” item that the consum-

er reporting agency supplies.

II-D. The Challenge to Section 1313.

We proceed to plaintiff's attack, levelled by cross appeal, on

the constitutionality of Section 1313 of the Maine Act.*° The

contention, as to which the Superior Court Justice made no de-

cision, is that Section 1313 must be nullified as facially violative

7010 M.R.S.A. § 1313 (Supp. 1979-80) provides:

“A consumer reporting agency may furnish a consumer report under the

following circumstances and no other:

“1. In response to the order. In response to the order of a court having ju-

risdiction to issue such an order;

“2. In accordance with the written instruction of the consumer. In accor-

dance with the written instructions of the consumer to whom it relates;

“3. To certain persons. To a person who 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;

A-36

of the First-Fourteenth Amendment protections afforded com-

mercial speech.

Section 1313 authorizes a consumer reporting agency to furn-

ish a consumer report only in the particular circumstances there-

in provided. These limitations may give surface suggestion that

Section 1313 unduly abridges constitutionally protected com-

mercial speech. From closer examination of them, however, we

conclude that the infirmity is more apparent than real. The

reason for our conclusion is that regardless of any of the other

restrictions imposed, Section 1313(3) (E) allows a consumer

report to be furnished to any person whom the consumer re-

porting agency “‘has reason to believe .. . has a legitimate busi-

ness need for the information in connection with a business

transaction involving the consumer.” In effect, then, this provi-

sion overrides all the other limitations and permits consumer re-

ports to be furnished in a circumstantial context so essentially

unlimited that it may fairly be regarded as leaving commercial

speech practically unrestricted. Although circumstances lying

outside Section 1313(3) (E), may be hypothesized in which the

furnishing of consumer reports would be prohibited, thereby to

make it arguable that restraints are imposed on constitutionally

protected commercial speech, we refuse to nullify Section 1313

in all its applications, i.e., facially, merely because of such hypo-

thetically conceived particular applications likely to be marginal

in nature and rarely to occur. We therefore leave for that future

case which will involve as reality what may presently be hypoth-

esized by imagination, namely, the determination whether Sec-

“B. Intends to use the information for employment purposes;

“C. Intends to use the information in connecticn with the un-

derwriting of insurance involving the consumer;

“D. Intends to use the information in connection with a deter-

mination 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 informa-

tion in connection with a business transaction involving the con-

sumer.”

A-37

tion 1313 as so applied may transgress, without warrant,

constitutionally protected commercial speech.?!

III. OTHER CONSTITUTIONAL CHALLENGES.

Regarding those provisions of Section 1314 and of Section

1321 that we have held unconstitutional as violative of protec-

tions given commercial speech by the First-Fourteenth Amend-

ments, we find it necessary to decide other contentions that

those same provisions contravene federal protections of sub-

stantive due process, the equal protection of the laws and inter-

state commerce. Hence, we confine our further review to the

constitutional attacks on such other provisions of the Maine

Act as we have not previously invalidated.

III-A. The Fourteenth Amendment “‘Vagueness”’ Issues.

By their cross appeal plaintiffs have challenged the phrase in

Section 1326 of the original Act, “‘person not authorized to re-

ceive that information” and the phrase in Section 1323(2) of the

original Act, ‘$100 for each item of erroneous information re-

ported which was the result of final action’’, as being too vague

to accord with the “‘due process of law’ mandate of the Four-

teenth Amendment. On each of these issues the Superior Court

Justice ruled against plaintiffs’ contention.

Plaintiffs’ claim of unconstitutional vagueness in the phrase

“person not authorized . . .” fails because of the 1978 amend-

ment to Section 1326. As pertinent, that section originally read:

‘“‘any officer or employee of a consumer reporting

agency who knowingly and intentionally provides in-

formation concerning an individual from the agency’s

files to a person not authorized to receive that infor-

mation shall be fined .. . or imprisoned... .” 10

M.R.S.A. § 1326 (Supp. 1977-78) (amended 1978)

(emphasis added)

*!This approach is in line with the reluctance of the Supreme Court of the

United States to extend to the area of commercial speech the “‘chilling’’ doc-

trine applicable to other modes of constitutionally protected speech, which

allows “‘a person .. . [to] challenge a statute on the ground that it might be ap-

plied unconstitutionally in circumstances other than those before the court.”

Bates v. State Bar of Arizona, 433 U.S. 350, 380, 97 S.Ct 2691, 53 L.Ed.2d 810

(1977); see Central Hudson Gas & Electric Corp., supra, n. 8 at —_.

A-38

The 1978 amendment changed the language as follows:

“any officer or employee of a consumer reporting

agency who knowingly and intentionally provides in-

formation concerning an individual from the agency’s

files to a person not authorized, within the meaning of

sections 1313 and 1314 subsection J, to receive that in-

formation shall be fined . . . or imprisoned... .”’ 10

M.R.S.A. § 1326 (Supp. 1979-80) (emphasis added)

The language given emphasis replaced the prior language

challenged by plaintiffs as vague. The amending Act, P.L. 1977

c. 677, was entitled ““AN ACT to Clarify and Define Certain

Existing Provisions of the Maine Fair Credit Reporting Act.”

The “Statement of Fact” accompanying Legislative Document

No. 2192, from which the amending Act was drawn, stated that

this change “clarifies” the meaning of ‘‘authorized” in Section

1326. We think it plain, then, that the amendment purported to

express what the legislative intendment had been from the

outset. This kind of clarification requires rejection of the vague-

ness challenge here made by plaintiffs which involves, we stress,

no claim of rights deriving from reliance on the terms of the

statute prior to the 1978 amendment.

We also turn aside plaintiffs’ “‘vagueness”’ attack on the pro-

vision in the original version of Section 1323(2) authorizing an

award of special damages as the Court may find appropriate,

but in any event

‘not less than $100 for each item of erroneous infor-

mation reported which was the result of final action.”

(emphasis added)

As to the alleged vagueness in the language emphasized, which

appears to make erroneous information reported the “result of”

rather than, as would make sense in the context, the factor

which “results in” final action, the Superior Court Justice de-

cided that the provision could have been written more artfully

but nevertheless

‘a reasonable person would conclude that a reporting

agency would be fined for each item of erroneous in-

formation resulting in final action by the user, that is,

[which is] a determining factor of the user’s decision.”

A-39

We agree, and we add as a supporting consideration the subse-

quent amendment of Section 1323(2), ?? which, although of

more extensive scope, includes a reiteration of legislative intend-

ment that the agency be penalized for each separate infraction

that may have contributed to a user’s adverse decision.

III-B. The Supremacy Clause Challenges.

Plaintiffs contend that the regulatory scheme and purposes of

the Federal Act cannot be reconciled with divergent provisions

of the Maine Act listed as follows.

1—The original Section 1317(4) (C), which required that

upon the discovery of erroneous information in a report, a

consumer reporting agency shall notify all those who received

said report within a two year period preceding the discovery.

The corresponding Federal Act provision requires such noti-

fication only at the request of the consumer. 15 U.S.C. § 168li

(d).

2—Section 1315(1) (A) in the original and amended Maine

Act, which places limitations on the disclosure of medical in-

formation. The Federal Act specifically excludes medical in-

formation from disclosure limitations.

3—Section 1319(2) of the Maine Act, which mandates that all

investigative consumer reports be written whereas the Federal

Act allows reports to be oral. 15 U.S.C. § 1681a(d), (e).

4—The omission of the Maine Act to confer the qualified im-

munity that the Federal Act affords to consumer reporting

agencies, users, or sources of information against liability in

actions in the nature of defamation, invasion of privacy, and

negligence in the reporting of information. 15 U.S.C.

§ 1681h(e).

2210 M.R.S.A. § 1323(2) (Supp. 1979-80) provides:

“Such amount of additional damages as the court may allow, but

not less than $100 for each violation of this chapter involving neg-

ligence, and for each consumer report containing any item of in-

formation that was inaccurate or that the consumer reporting

agency had reason to believe was not relevant to the purpose for

which it was sought and that contributed in whole or in part to

the decision to take adverse action against the consumer.”

A-40

5—The Maine Act fails expressly to authorize limited disclo-

sure of information to a governmental agency whereas the

Federal Act contains such an express authorization. 15

U.S.C. § 1681f.

Plaintiffs maintain that under the Supremacy clause of Arti-

cle VI of the Constitution of the United States, the aforemen-

tioned Maine Act provisions must yield to those of the Federal

Act.

The Federal Act provides in Section 1681t that it

“does not annul, alter, affect, or exempt any person

subject to the provisions of this subchapter from com-

plying with the laws of any State with respect to the

collection, distribution, or use of any information on

consumers, except to the extent that those laws are in-

consistent with any provision of this subchapter, and

then only to the extent of the inconsistency.”

Section 1681t thus manifests the Congressional intendment as

to the scope of regulation left open to the states. The key inquiry

relates to the meaning of “‘inconsistent.”’

The defendant Attorney General says that in view of the legis-

lative history of Section 1681t, “inconsistent” should be held to

mean “‘less protective of consumers.” He argues on this basis

that any state regulation affording consumers a greater protec-

tion than is given by the Federal Act cannot be “inconsistent”

regulation, no matter what may be the impact upon consumer

reporting agencies of such enhanced protection to consumers.

Congressional legislative history lends a degree of support to

this contention. For example, Congresswoman Leonor Sulli-

van, who sponsored the House version of the Federal Act, HR

16340, and chaired the Subcommittee on Consumer Affairs of

the House Committee on Banking and Currency, suggested a

concept of “‘inconsistency”’ as follows:

“State laws which are inconsistent with the Federal

law would be pre-empted only to the extent of incon-

sistency. No state law, however, would be pre-empted

unless compliance with that law would entail a viola-

tion of the Federal law. In short, state laws requiring

A-41

additional duties should not be affected by the passage

of this law.”’ 166 Cong. Rec. 36573 (1970) (emphasis

added)

Despite this suggestion as to Congressional intendment, we

must reject the Attorney General’s contention. We regard as too

simplistic the criterion he proposes. It would make one, albeit

an important, objective of 1681t of the Federal Act—the protec-

tion of consumers—the absolutely controlling objective, den-

igrating all of the other objectives implicit not only in the

express statement of findings in Section 1681(a) but also in

other provisions of the Federal Act.

Indeed, the textual concept of “inconsistency” in Section

1681t tends to suggest that it embodies the decisional law on the

general subject of federal preemption by virtue of the suprema-

cy clause. The case law delineation of the “inconsistency” giving

rise to federal preemption is that the state law frustrates, or

stands as an obstacle to, the accomplishment of the “full pur-

poses and objectives of the Congress.”’ Hines v. Davidowitz, 312,

U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941) (emphasis added).

See Jones v. Rath Packing Company, 430 U.S. 519, 525, 97 S.Ct.

1305, 51 L.Ed.2d 604 (1977). Furthermore, the entirety of the

“inconsistency” phrasing in Section 168It, “to the extent that

those laws are inconsistent with any provision of this subchapt-

er, and then only to the extent of the inconsistency” (emphasis

added), discloses that Congress expected that state regulation

would mesh closely with the Federal Act. Thus, the determina-

tion whether state law frustrates any particular provision of the

Federal Act necessitates a comparison of specific requirements

not only in terms of their particular content vis-a-vis each other

but also in relation to the inquiry whether the “‘full purposes

and objectives” of Congress are being thwarted. Since the sum

total of purposes and objectives of the Federal Act cannot be re-

duced to the simple formula of “absolute protection for the con-

sumer’’, we cannot say that a state retains unbridled authority

to expand consumer protections while frustrating other objec-

tives of the Federal Act. See Retail Credit Co. v. Dade County,

Florida, 393 F.Supp. 577 (S.D.Fla. 1975).

A-42

III-B-1. Notification of Corrected Information.

Plaintiffs contend that the requirement in the original Maine

Act that upon discovering an error in a report, a consumer re-

porting agency shall notify all persons who received that report

within the previous two years, must fall in the face of the corre-

sponding provision in the Federal Act, Section 1681c(d), which

omits any such mandate for notification when there is no con-

sumer request. Federal Section 1681c(d), however, does provide

for an optional updating and correction of reports.

We are unpersuaded that the differences involved in a man-

date of notification and an option of correction generates a con-

flict between the underlying purposes of the two Acts so serious

as to render the difference in regulation constitutionally intol-

erable. See Credit Data of Arizona, Inc. v. State of Arizona, 602

F.2d 195 (9th Cir. 1979).

III-B-2. The Requirement of Written Reports.

Plaintiffs contend that the Maine Act’s mandate that investi-

gative consumer reports be in writing cannot stand because the

Federal Act permits such reports to be oral. Plaintiffs argue that

the Federal Act reveals a federal concern that consumer report-

ing proceed rapidly and efficiently, and this federal interest

tends to be impaired by an insistence on communication in writ-

ing.

The argument lacks cogency. The requirement of writing in

Section 1319(2) of the Maine Act advances a purpose of both

the Federal and Maine Acts, to assure the accuracy of reported

information by the particular means of affording consumers

access to the information. The stricter Maine requirement that

the information be in writing results in a documentation and

permanent recordation of the information communicated in a

particular transaction. It thus makes it more accessible to con-

sumers and reduces the likelihood that particular information

may be omitted from reports communicated in the future. Ba-

lanced against these benefits, any delay caused in the communi-

cation of information by the necessity of putting it in writing

must be taken to be an incidental divergence of regulation insuf-

ficient to bring federal preemption into play. See Credit Data of

Arizona v. State of Arizona, supra.

A-43

III-B-3. Disclosure of “‘Medical Information”

Section 1315(1) (A)?? of the Maine Act authorizes, with limi-

tations, the disclosure to consumers of ‘‘medical information”’,

defined in 10 M.R.S.A. § 1312(8) as

“information or records obtained, directly or indi-

rectly and with the consent of the individual to whom

it relates, from a licensed physician, medical practi-

tioner, hospital, clinic or other medical or medically

related facility.”’

The Federal Act defines “‘medical information” similarly but

excludes it from mandated disclosure as follows:

“Every consumer reporting agency shall. . . disclose

to the consumer:

‘*(1) The nature and substance of all informa-

tion (except medical information) in its files on

the consumer at the time of the request.” 15

U.S.C. § 1681g(a) (1) 1974).

In Retail Credit Co. v. Dade County, Florida, supra, the pre-

emption issue was raised by a challenge to the constitutionality

of a provision in a Dade County Ordinance like that in Section

1315(1) (A). From examination of the Congressional legislative

history the court learned that Congress had several times con-

sidered and rejected a provision basically similar to the one

before it, *‘and it therefore concluded that Congress has plainly

manifested intendment to refuse disclosure of medical informa-

tion to consumers.

Despite the Federal Act’s unqualified exclusion from disclo-

sure of medical information, we think that the particular danger

Congress sought to avoid thereby is sufficiently averted by the

23Amended Section 1315(1) (A) is somewhat different in substance from its

original version which authorized disclosure directly to the consumer “upon

written authorization from the consumer’s attending physician.” Amended

Section 1315(1) (A) permits disclosure to a licensed physician whom the con-

sumer could then consult.

*The various proposals rejected by Congress are summarized in Retail Credit

Co. v. Dade County, supra, at 583, n. 10.

A-44

procedures set up in Section 1315(1) (A) to avoid nullification of

them by federal preemption. The principal purpose of the feder-

al unqualified exclusion, by definition applicable only to formal

medical records, was revealed in the Committee Report to the

House Amendment adding to Section 168la(e) of the Federal

Act the definition of the term ‘medical information.” The

Report said that

[t]he rationale was that raw medical information

should only be tendered with the counsel of a physi-

cian or other medically trained personnel.” H.R.

Report No. 91-975, 91st Cong., 2nd Sess., reprinted in

[1970] U.S. Code. Cong. & Ad. News 4394, at 4414.

Section 1315(1) (A) of the Maine Act is in harmony with this ra-

tionale, since it authorizes disclosure of medical information

only to a licensed physician who may be expected to exercise

professional judgment regarding further disclosure to the con-

sumer. Thus, the Maine Act does not expose the consumer to

“raw” medical information.

We are aware that Section 1315(1) (A) may not tend to serve a

secondary purpose underlying the Federal Act’s exclusion of

medical information from disclosure: avoidance of an under-

mining of the traditional doctor-patient relationship that could

arise because the physician to whom the information is dis-

closed might not be the same physician who had treated the

consumer. 116 Cong. Rec. 17634 (October 9, 1970). See Retail

Credit Co. v. Dade County, Florida, supra, at 582. We deem this

too minor a divergence, however, to require applicability of pre-

emption. We say this particularly since the physician who

treated the patient will probably have kept medical records and

will be able to advise the physician who receives the disclosed

information; or else such records will likely be under the control

of a medical facility where another physician may have access to

them with the consumer’s consent.

Accordingly, we sustain Section 1315(1) (A) of the Maine Act

as not “inconsistent” with the purposes and objectives of the

Federal Act.

III-B-4. Qualified Immunity.

Section 168lh(e) of the Federal Act states:

A-45

“no consumer may bring any action or proceeding in

the nature of defamation, invasion of privacy, or neg-

ligence with respect to the reporting of information

against any consumer reporting agency, any user of

information, or any person who furnishes informa-

tion to a consumer réporting agency, based on infor-

mation disclosed pursuant to section 1681g, 1681h, or

1681m of this title, except as to false information fur-

nished with malice of willful intent to injure such con-

sumer.”

The three sections specifically referred to have the following

scope. Section 1681g outlines the substantive content of the dis-

closure to be made to consumers; Section 1681h generally delin-

eates the procedures by which the information is to be disclosed;

and Section 1681m imposes disclosure requirements on users in

particular circumstances.

The disclosure provisions of the Maine Act are generally pat-

terned after those of the Federal Act, the objective of each Act

being to have full disclosure to the consumer of all information

required to be disclosed. However, the Maine Act goes beyond

the Federal Act in the procedures established for disclosure.

Whereas the Federal Act merely requires that consumer report-

ing agencies disclose the “‘nature and substance of all informa-

tion’’, 7°15 U.S.C. § 1681g(a) (1), the Maine Act goes further in

prescribing means to ensure full disclosure, by requiring: (1)

that a consumer reporting agency disclose “all information

[except medical information which is subject to special disclo-

sure rules] in its files on the consumer at the time of the re-

quest”, 10 M.R.S.A. § 1315(1) (A); (2) that a consumer “be

permitted a personal visual inspection of his file”, 10 M.R.S.A.

§ 1316(2) (A); (3) that upon request, the consumer “‘shall be fur-

nished copies of any investigative consumer reports,” 10

M.R.S.A. § 1316(2) (A); and (4) that a consumer may receive “‘a

copy of [his] file’’ through the mail, after a written request with

proper identification. Section 1316(2) (C).

Congress expressly rejected the notion that consumers should be allowed

direct access to their files. See H.R. Report No. 91-975, 91st Cong., 2nd Sess.,

reprinted in [1970] U.S. Code Cong. & Ad. News. 4394, at 4415.

A-46

The other difference in this regard between the Maine and

Federal Acts is that the Maine Act fails to confer the qualified

jmmunity given by the Federal Act as to “any action or pro-

ceeding in the nature of defamation, invasion of privacy, or neg-

ligence with respect to the reporting of information.” The

Maine legislat'‘re had considered amending the Maine Act to

incorporate such a provision, but such an amendment was not

enacted. See Legislative Record, 108th Legislature, 616-617

(March 16, 1978).

We decide that, consistently with the supremacy clause of the

federal Constitution, the Maine Act’s withholding of the qual-

ified immunity conferred by the Federal Act may stand. We so

conclude because the Maine Act resorts to an adequate alterna-

tive methodology of achieving the basic objective the Federal

Act seeks to accomplish through the mechanism of qualified im-

munity, and thus it is in harmony with the Federal Act.

We therefore distinguish, at once, Retail Credit Co. v. Dade

County, supra, on the ground that its holding rested on a virtual

identity between the disclosure provisions of the Dade County

Ordinance and those of the Federal Act, except that the Dade

County Ordinance omitted the provision for qualified immuni-

ty. By contrast, although tending to follow the pattern of the

Federal Act, the provisions of the Maine Act establish require-

ments of disclosure to consumers not found in the Federal Act

but which serve the dominant purpose furthered by the Federal

Act’s grant of qualified immunity.

That purpose, which the Federal Act shares in common with

the Maine Act, is to assure the full disclosure to consumers of

all information about them that is being communicated through

consumer agency reports, thereby to allow consumers not only

to be aware of, but also to participate in the process of review-

ing, refining, and correcting for accuracy the body of informa-

tion that is so likely to underly important economic decisions

affecting them.

The legislative history of the Federal Act reveals that Con-

gress regarded qualified immunity as the “quid pro quo for full

disclosure.”’ 115 Cong. Rec. 13908 (November 6, 1969). To en-

courage agencies or users voluntarily to make ithe fullest possi-

A-47

ble disclosure to consumers of information on file, including all

the aciverse information, Congress concluded that they should

be given a qualified immunity from liability in actions that may

be brought against them for defamation, invasion of privacy or

negligence in the reporting or use of information.

The Maine Act substitutes for this federal approach geared to

stimulating voluntary disclosure an approach relying on compul-

sion. The Maine Act goes beyond the Federal Act’s directive

that the consumer be given a summary of the nature and sub-

stance of the information and requires that consumers shall

have complete and direct access to the files and shall receive

copies of the investigative consumer reports (although sources

of information may be withheld, see Section 1315(1) (B). We

conclude that this alternative technique utilized by the Maine

Act to achieve fullness of disclosure to consumers sufficiently

serves, without thwarting in any material respect, the founda-

tional purpose of the Federal Act’s grant of qualified immuni-

ty.”

The Congressional legislative history suggests that the Federal Act’s confer-

ring of qualified immunity on “any person who furnishes information to a

consumer reporting agency”’ serves the ancillary purpose of avoiding drying

up of sources of information. The Maine Act’s regulatory scheme does not

tend to serve this purpose. However, when we concentrate on the kinds of suits

likely to be brought against persons who are sources of information to con-

sumer reporting agencies, we discern that of the three mentioned in the Feder-

al Act only two, defamation and invasion of privacy suits, have relevance.

In a defamation action the source of information would not be subject to

liability in any event unless the information given was false. That, in this

regard, the Maine Act has thus chosen to give a higher priority to assuring a

flow of information that is true rather than to assure the fullness of a flow of

information regardless of truth or falsity does not cause it to be inconsistent

with the basic purposes of the Federal Act. More particularly is this so since

commercial speech that is false enjoys no constitutional protection and, hence,

an objective to assist the flow of information that may be false is hardly an ob-

jective of importance.

As to suits for invasion of privacy, the conduct by which persons, as

sources, provide information to consumer agencies will generally be such that

they are likely to be exposed to liability in suits for invasion of privacy only as

they are alleged to have participated in (1) publicizing the secrets, or certain in-

timate facts about the persons, of others, or (2) depicting perscas to the public

in a false light. Such conduct may reasonably be expected to occur rather inf-

requently in the consumer reporting context. Hence, the need to protect it by

A-48

For this reason, then, the entirety of disclosure regulation by the

Maine Act, an incidental aspect of which is the omission to

confer qualified immunity, is not “inconsistent” with the Feder-

al Act.

III-B-5. Limited Disclosure to Governmental Agencies.

The Federal Act provides that

‘“‘a consumer reporting agency may furnish identify-

ing information respecting any consumer, limited to

his name, address, former addresses, places of em-

ployment, or former places of employment, to a gov-

ernmental agency.” 15 U.S.C. § 1681f (1974).

Plaintiffs contend that this provision for limited disclosure to

governmental agencies must override by preemption what

plaintiffs take to be a denial of it in the Maine Act—a denial

shown, they say, by the omission of the Act to provide expressly

for such limited disclosure combined with restrictions upon dis-

closure delineated in Section 1313.

Facially, the language of the Federal and Maine Acts does

not present so direct a conflict, if conflict at all, as plaintiffs

claim. The Federal Act states only an authorization, not a man-

date, for limited disclosure to governmental agencies, and the

Maine Act does not plainly prohibit such limited disclosure.

Despite the expressly stated restrictions of Section 1313, under

Section (3) (D) or (E) thereof?’ disclosure to governmental agen-

cies would be permissible in most cases likely to arise.

conferring qualified immunity, in order to encourage a flow of information

useful to consumer reporting agencies, is too marginal to yield a mandate, by

preemption, that the Maine scheme of regulation embody the federal grant of

qualified immunity.

?’1These pertinent provisions of Section 1313 are:

“A consumer reporting agency may furnish a consumer report under the

following circumstances and no other:

it)

“3. .... To a person who it has reason to believe:

A-49

For the same policy reasons, then, that led us to decide ag-

ainst nullifying in this proceeding the restrictions imposed by

Section 1313 as facially violating the constitutional protection

of commercial speech, ante at pp. 46, 47, we decide against

plaintiffs the issue of federal preemption relative to the disclo-

sure of information to governmental agencies. We so decide be-

cause the issue is raised here on the basis of the facial provisions

of the Maine and Federal Acts, rather than in an “as applied”’

context calling upon us to adjudicate in an actual set of circum-

stances whether the Maine Act prohibits a particular disclosure

of information to a governmental agency which the Federal Act

authorizes.

The entry shall be:

1—Appeal of defendant and cross appeal of plaintiffs

denied.

2—The judgment of the Superior Court is modified as

follows:

(a) As to the first sentence thereof:

(1) by striking therefrom “‘ss 1321 and ss

1314” and inserting in their place:

“Section 1314(1), Section 1321(1),

those particular provisions in Section

1321(2) and (3) prohibiting the inclu-

sion in a consumer agency report, or

the retention in a consumer agency’s

file, of ‘irrelevant’ information or of

information the agency ‘has reason to

believe is not relevant to the purpose

“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 re-

quired by law to consider an applicant’s financial responsi-

bility or status; or

“E. Otherwise has a legitimate business need for the in-

formation in connection with a business transaction involv-

ing the consumer.”

A-50

for which it is sought’, and Section

1321(4) (A)”; and

(2) by inserting after the words ‘“‘amended

version” and before the words “of the

Maine Fair Credit Reporting Act” the

phrase, to be set off by commas: “‘as well as

Section 1323(2).”

Thus modified, said first sentence of the

judgment is made to read in its entirety:

“The court finds for the plaintiffs on the

grounds that Section 1314(1), Section

1321(1), those particular provisions in Sec-

tion 1321(2) and (3) prohibiting the inclu-

sion in a consumer agency report, or the

retention in a consumer agency’s file, of ‘ir-

relevant’ information or of information the

agency ‘has reason to believe is not relevant

to the purpose for which it is sought’, and

Section 1321(4) (A) of both the original and

amended version, as well as Section

1323(2), of the Maine Fair Credit Report-

ing Act, 10 M.R.S.A. ss 1311 et seq. are

void and unconsitutional for violation of

the First Amendment.”

(b) By striking from the judgment the sentence

reading:

“Notwithstanding the Court’s deci-

sion for the Plaintiffs on their First

Amendment challenges, the Court

also finds that the following terms are

void for vagueness pursuant to the

Due Process Clause of the Fourteenth

Amendment: ‘personai life style’, ‘phi-

losophy’ and ‘uncorroborated hear-

say’ as found in ss 1321(1) of the

Original act; ‘political beliefs’ found in

ss 1321(1) of the amended act; and in

all instances where the term ‘relevant’,

A-51

its negative or ‘obsolete’ are found in

the original and amended versions of

the act, including ss 1321(2) and (3)

and ss 1323(2) of the amended act.”

tence which commences with the words:

“The Court finds for the Defendant... .”

and by substituting in place thereof a full

sentence reading:

“The Court finds for the Defendant

on Count 5 of Plaintiffs’ Amended

Complaint which alleged violations of

the supremacy clause of Article VI of

the Constitution of the United

States.”

3—The judgment of the Superior Court, as thus

modified, is affirmed.

4—Case remanded to the Superior Court for

entry of the modified judgment herein af-

firmed.

5—No costs on appeal.

All concurring.

Attorneys for the Plaintiffs:

Bernstein, Shur, Sawyer and Nelson

By: Gordon F. Grimes, Esq.

(orally)

Peter J. Rubin, Esq.

Barnett I. Shur, Esq.

One Monument Square

Portland, Maine 04101

Attorney for the Defendant:

Peter B. Bickerman, Esq.

Assistant Attorney General

(orally)

State House

Augusta, Maine 04333

B-1

APPENDIX B

SUPERIOR COURT

STATE OF MAINE CIVIL ACTION

KENNEBEC, SS Docket No. CV77-663

EQUIFAX SERVICES, INC.

and

FRANK W. ROBINSON )

) DECISION

and AND

PAUL D. WEEKS, ‘ ORDER

Plaintiffs .

v. )

)

JOSEPH E. BRENNAN, Attorney General, )

)

Defendant )

This is a proceeding for a Declaratory Judgment and Injunc-

tive Relief regarding the constitutionality of the Maine Fair

Credit Reporting Act, 10 M.R.S.A. § 1311 ef seq.

This case was tried on November 6, 1978. In addition to the

testimony and exhibits presented on that day, the parties also

agreed to make relevant parts of the transcript of the hearing on

the issuance of a preliminary injunction held on November 7,

1977, part of the record of this case. The Court has reviewed in

detail these transcripts, the depositions and exhibits of all par-

ties to the extent that they are relevant and material, and has

read thoroughly the briefs submitted by both parties.

B-2

Based upon the evidence presented and for the reasons set

forth herein, the Court finds certain provisions of 10 M.R.S.A.

§ 1311 et s

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.