CEI Files Amicus Curiae In The Case of Trans Union Corporation vs. The Federal Trade Commission

CEI Files Amicus Curiae In The Case of Trans Union Corporation vs. The Federal Trade Commission

February 21, 2000

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SUMMARY OF ARGUMENT

The D.C. Circuit below in Trans Union II and III considered a first amendment challenge to the FTC’s decision to require Trans Union to individually contact customers to get them to "opt in" before their names and addresses (regulated as "credit reports" but not the in fact the full report) could be used for targeted marketing. The Circuit Court determined that, because this Court had held in Dun & Bradstreet that credit reports were "private speech" of lesser first amendment value, that the FTC’s regulation would be subject to intermediate rather than full scrutiny. However, the "private speech" inquiry of Dun & Bradstreet is a throwback to days when only newsworthy speech was fully protected, and ought not to be expanded outside of its original context, a defamation case.

Its application to Trans Union’s speech, which is truthful, is entirely inappropriate and, indeed, bizarre. Perhaps because the D.C. Circuit chose to rely on the confusing "private speech" doctrine, the D.C. Circuit failed to apply the "substantial interest" test it chose to employ with any sort of rigor. It might just as well have been applying a rational basis test. It failed to identify any concrete government interest in the regulations in question other than a general interest in privacy. Given that the question in the case was whether the government’s claimed interest in privacy is legitimate, given the protection the first amendment generally gives to truthful speech, the lower court’s reasoning was essentially circular. And it entirely failed to consider different types of regulation that would have served the government’s legitimate interests as well or better, particularly opt-out.

Because the D.C. Circuit’s analysis below was, frankly, defective, the question remains of whether the commercial speech doctrine would have served as a better framework for analysis. The speech in question — the communication of lists of names and addresses that fit certain criteria between businesses — is not itself advertising. It may be ultimately used in for-profit advertising, or in political speech, or for other purposes. So the applicability of the commercial speech doctrine is an open question. But in any case, the information Trans Union seeks to communicate here is valuable, not only to businesses but to consumers. And the regulation in question, because of the enormous expense and inconvenience of opt-in requirements, amounts to a virtual ban on the speech. This speech is thus an ideal candidate for heightened scrutiny, although it may be closely akin to commercial speech.