Companies Can Buy Bulk DMV Records, Court Says

(CN) - Businesses can buy and resell motor vehicle records in bulk without actually using them, so long as they intend to use them for "permissible purposes," the 5th Circuit ruled, dismissing six class actions challenging the practice.

Under the Driver's Privacy Protection Act (DPPA), businesses must demonstrate a "lawful purpose" for obtaining DMV records containing drivers' names, photographs, Social Security numbers and other personal information. Private companies can use this information to prevent insurance fraud, verify a worker's driver's license, notify the owner of a towed or impounded vehicle, and conduct research and surveys, among other permissible uses. Government agencies, law enforcement officers and licensed private investigators are also authorized to use DMV records.

A class of Texas residents accused the state of disclosing their motor vehicle records in bulk to businesses that merely wanted to maintain databases or resell the information without using it. The class claimed that simply keeping records for future use was an "impermissible purpose" under federal law.

The New Orleans-based federal appeals court disagreed, upholding a federal judge's dismissal of the case.

"We hold that this type of bulk obtainment does not violate the DPPA," Judge William Garwood wrote for the three-judge panel.

"The text of the statute strongly indicates that it allows both individual and bulk distribution."

The panel concluded that it's legal for someone to buy DMV records in bulk "for the purpose of making permissible actual use" of those records, "even if that person does not actually use every single item of information therein."

Defendants included research companies, online database operators, grocery chains, insurance companies, employee screening services, technology businesses and consulting companies.

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