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Pavone v. Meyerkord & Meyerkord, LLC

United States District Court, N.D. Illinois, Eastern Division.

August 23, 2016

ANTONIO PAVONE, on behalf of himself and all others similarly situated, Plaintiff,
v.
MEYERKORD & MEYERKORD, LLC, LEXISNEXIS RISK SOLUTIONS, INC., and IYETEK, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          AMY J. ST. EVE, District Court Judge:

         On February 26, 2016, Plaintiff Antonio Pavone filed the present three-count Third Amended Class Action Complaint against Defendants Meyerkord & Meyerkord, LLC (“Meyerkord”), LexisNexis Risk Solutions, Inc. (“LNRS”), and iyeTek, LLC (“iyeTek”) for violating the Driver’s Privacy Protection Act, 18 U.S.C. § 2721, et seq. (“DPPA”) and the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”). Before the Court is LNRS’s and iyeTek’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court grants in part without prejudice and denies in part Defendants’ motion. The Court grants Plaintiff leave to file a Fourth Amended Class Action Complaint in accordance with this ruling keeping in mind counsel’s Rule 11 obligations. Plaintiff’s Fourth Amended Class Action Complaint is due on or before September 6, 2016.

         LEGAL STANDARD

         “A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted.” Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014). Under Rule 8(a)(2), a complaint must include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted). Under the federal notice pleading standards, a plaintiff’s “factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Put differently, a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1397, 1949, 172 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570). In determining the sufficiency of a complaint under the plausibility standard, courts must “accept all well-pleaded facts as true and draw reasonable inferences in the plaintiffs’ favor.” Roberts v. City of Chicago, 817 F.3d 561, 564 (7th Cir. 2016).

         BACKGROUND

         In his Third Amended Class Action Complaint, Plaintiff alleges that on the afternoon of January 15, 2015, he was involved in an automobile accident. (R. 49, Third Am. Compl. ¶ 11.) After the accident, someone alerted the Schaumburg, Illinois Police Department and an officer responded to the accident scene. (Id. ¶ 12.) At the responding officer’s request, Plaintiff presented his driver’s license to the officer, who then transferred certain information, including Plaintiff’s name, driver identification number, home address, date of birth, and gender, from his driver’s license into an Illinois Traffic Crash Report (“Report”) using the “iyeCrash” electronic crash reporting system. (Id. ¶ 13.) Plaintiff further alleges, upon information and belief, that in accordance with standard policing procedures of the Schaumburg Police Department (and the other 348 Illinois policing agencies that partner with LNRS and iyeTek for crash report creation services), the responding Schaumburg police officer corroborated the information printed on Plaintiff’s driver’s license with Illinois Secretary of State records that were available to the officer via the computer system in his police vehicle. (Id. ¶ 14.) Also, Plaintiff alleges that the Report contained personal information about Plaintiff’s wife and his infant son, including their names, home address, telephone numbers, dates of birth, and gender. (Id. ¶ 15.)

         In addition, Plaintiff alleges, upon information and belief, that the Report was automatically uploaded to iyeTek’s and LNRS’s databases at the time of its creation. (Id. ¶ 16.) According to Plaintiff, iyeTek and LNRS regularly sell Reports to law firms like Meyerkord on a daily or weekly basis allowing the law firms to mail solicitation letters and advertise their legal services to persons involved in car accidents. (Id. ¶ 17.) Within a day of his January 15, 2015 automobile collision, Plaintiff asserts that iyeTek and LNRS, in keeping with their regular policy and practice, knowingly sold Meyerkord an unredacted copy of his Report, which contained Plaintiff’s name, driver identification number, home address, telephone number, date of birth, and gender obtained from a motor vehicle record. (Id. ¶ 18.) Plaintiff also alleges that within 24 hours of the collision, Meyerkord sent solicitation parcels to Plaintiff, his wife, and his infant son at their home address. (Id. ¶ 29.) Each parcel stated that it was “ADVERTISING MATERIAL.” (Id. ¶ 30.)

         Moreover, Plaintiff contends that Meyerkord obtains Reports from iyeTek and LNRS on a daily basis in order to mail advertisements to the individuals involved in car accidents for the purpose of soliciting those individuals as new clients. (Id. ¶ 19.) Specifically, Meyerkord obtains Illinois Traffic Crash Reports in bulk for a fee without knowing the names and addresses of the persons who are the subjects of these reports in advance of ordering them and without obtaining the prior express consent of those persons. (Id. ¶ 20.) Plaintiff alleges that iyeTek and LNRS sell Reports in bulk for a fee and without requiring its law firm customers to know the names and addresses of the persons who are the subjects of such reports in advance of ordering them and without requiring them to obtain the prior express consent of those persons. (Id. ¶ 21.) In addition, Plaintiff states, upon information and belief, that the number of persons whose Illinois Traffic Crash Reports have been obtained by Meyerkord from iyeTek and LNRS for the purposes of advertising and solicitation is in the hundreds if not thousands. (Id. ¶ 22.) Plaintiff also alleges, upon information and belief, that iyeTek and LNRS are aware that the law firm customers to which they sell Reports are using them for advertising and solicitation purposes and that Meyerkord provides - and iyeTek and LNRS accept - improper and untrue certifications attesting that the records would only be used for DPPA permissible purposes. (Id. ¶¶ 25, 27.)

         ANALYSIS

         I. DPPA Claims Against LNRS and iyeTek - Count II

         In Count II, Plaintiff alleges that Defendants LNRS and iyeTek violated the DPPA, specifically 18 U.S.C. § 2722(a), (b). “The DPPA regulates the disclosure of personal information contained in the records of state motor vehicle departments (DMVs).” Maracich v. Spears, __ U.S. __, 133 S.Ct. 2191, 2195, 186 L.Ed.2d 275 (2013). The DPPA prohibits “private individuals from ‘knowingly ... obtain[ing] or disclos[ing] personal information, from a motor vehicle record, for any use not permitted under Section 2721(b).’” Graczyk v. West Pub. Co., 660 F.3d 275, 277 (7th Cir. 2011) (quoting 18 U.S.C. § 2722(a)); see also Maracich, 133 S.Ct. at 2199 (A person “who knowingly obtains, discloses or uses personal information, from a motor vehicle record, for a purpose not permitted under this chapter shall be liable to the individual to whom the information pertains.” (quoting 18 U.S.C. § 2724(a)). “The DPPA, however, does not prohibit all unconsented disclosures of personal information” and “permits (and in some circumstances requires, see § 2721(b) (requiring disclosure in connection with vehicle safety and theft)) disclosure for certain uses.” Graczyk, 660 F.3d at 277. Specifically, § 2721(b) permits disclosure of personal information for fourteen permissible uses, including for “use by any government agency, including any court or law enforcement agency, in carrying out its functions, or any private person or entity acting on behalf of a Federal, State, or local agency in carrying out its functions.” Senne v. Village of Palatine, Ill., 784 F.3d 444, 445 (7th Cir. 2015) (quoting 18 U.S.C. § 2721(b)(1)); see also Maracich, 133 S.Ct. at 2195 (“Disclosure of personal information is prohibited unless for a purpose permitted by an exception listed in 1 of 14 statutory subsections.”). “In section 2721(c), the DPPA regulates the resale of personal information” and that “section provides in pertinent part that, ‘[a]n authorized recipient of personal information ... may resell or redisclose the information only for a use permitted under subsection [2721(b) ].’” Graczyk, 660 F.3d at 278 (quoting 18 U.S.C. § 2721(c)).

         In the their motion to dismiss, Defendants iyeTek and LNRS argue that they had a permissible use under the DPPA because it explicitly authorizes the use of personal information “by any government agency, including any court or law enforcement agency, in carrying out its functions, or any private person or entity acting on behalf of a Federal, State, or local agency in carrying out its functions.” 18 U.S.C. § 2721(b)(1). Plaintiff, on the other hand, argues that although Defendants acted properly under § 2721(b)(1), Defendants violated the DPPA because they resold Plaintiff’s information - without Plaintiff’s express consent - to the law firm Meyerkord for advertising purposes. See 18 U.S.C. § 2721(b)(12); see also Maracich, 133 S.Ct. at 2199, 2203; Dahlstrom v. Sun-Times Media, LLC, 777 F.3d 937, 944 (7th Cir. 2015).

         As the Court discussed in its earlier ruling in this lawsuit, “Section 2721(b)(12) - the solicitation exception - [] provides that certain personal information may be disclosed [f]or bulk distribution for surveys, marketing, or solicitations if the State has obtained the express consent of the person to whom such personal information pertains.” Pavone v. Meyerkord & Meyerkord, LLC, 118 F.Supp.3d 1046, 1052 (N.D. Ill. 2015).[1] As the Court explained, “the solicitation exception explicitly requires obtaining express consent of the individual to whom the information pertains.” Id.; see also Maracich, 133 S.Ct. at 2199 (§ 2721(b)(12) requires a driver’s affirmative consent before solicitations can be sent). Viewing the well-pleaded allegations and all reasonable inferences in Plaintiff’s favor, he has sufficiently alleged that iyeTek and LNRS, in keeping with their regular policy and practice, knowingly sold an unredacted copy of his accident report to the law firm Meyerkord and that this accident report contained Plaintiff’s name, driver identification number, home address, telephone number, date of birth, and gender obtained from a motor vehicle record. (Third Am. Compl. ¶ 18.) Plaintiff further alleges that iyeTek and LNRS sell such reports in bulk for a fee and without requiring its law firm customers to know the names and addresses of the persons who are the subjects of such reports in advance of ordering them and without requiring them to obtain the prior express consent of those persons. (Id. ¶ 21.) Under these facts, Plaintiff has alleged a plausible claim for relief under the federal pleading standards. See Iqbal, 556 U.S. at 679 (“Determining whether a complaint states a plausible claim for relief” is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”).

         Nevertheless, Defendants argue that the vehicular accident information at issue is expressly exempted from the DPPA’s definition of “personal information, ” and therefore, their conduct in reselling this ...


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