Supreme Court rejects case testing consumer privacy rights

WASHINGTON (AP) _ One of the nation's largest credit reporting firms lost a Supreme Court appeal Monday testing limits on how credit agencies can use information and the rights of consumers to keep

Monday, June 10th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ One of the nation's largest credit reporting firms lost a Supreme Court appeal Monday testing limits on how credit agencies can use information and the rights of consumers to keep some details private.

The case was an appeal from Trans Union LLC, one of the nation's three largest credit reporting firms. The company claims its free-speech rights are violated by the Federal Trade Commission's interpretation of a federal law limiting some sale of consumer information.

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

Justices Sandra Day O'Connor and Anthony M. Kennedy issued a written dissent, saying they would have heard the case because of the implication for Trans Union, which could face bankruptcy from a tide of lawsuits over the release of consumer information.

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

In other action Monday, the court agreed to hear two cases in the term that begins in October, and rejected several others.

_The court said it would hear an appeal over funding for legal services for the poor. Justices will consider whether the funding structure used in some states violates the constitutional guarantee of payment for property seized by the government.

The dispute centers on interest-bearing trust accounts that lawyers set up to hold client funds during real estate and some other transactions. The court will decide if it is an unconstitutional ``taking'' to use interest from those accounts to underwrite legal aid programs.

_The court agreed to hear a California ranch owner's case in a dispute with the U.S. Army Corps of Engineers and the Environmental Protection Agency. At issue is how far the government can go to protect wetlands, including fining farmers for deep plowing, also known as ``deep ripping,'' in wetlands areas without a permit.

Deep plowing is often done to prepare vineyards and orchards.

Lower courts said the owners of Borden Ranch in California's Central Valley were guilty of hundreds of violations of the Clean Water Act.

_The court refused to consider reviving New York City public housing rules that would give preferences to working families seeking a place to live _ rules opposed by some minorities. An appeals court blocked them from being used in some complexes because of a desegregation effort.

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

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

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

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

The cases are Trans Union LLC v. Federal Trade Commission, 01-1080; Washington Legal Foundation v. Legal Foundation of Washington, 01-1325; Borden Ranch Partnership v. U.S. Army Corps of Engineers, 01-1243; New York City Housing Authority v. Davis, 01-1466.