The Third Circuit recently ruled that a labor union violated the federal Driver’s Privacy Protection Act (“DPPA”) when it accessed the motor vehicle records of Cintas employees for an improper “labor-organizing” purpose. In Pichler v. UNITE, the divided court affirmed the district court’s grant of summary judgment to the plaintiffs whose home addresses were obtained as part of the Union of Needletrades, Industrial & Textile Employees’ (“UNITE”) drive to organize Cintas employees. In reaching its conclusion, the court held that punitive damages may be awarded for violations of the DPPA. The court also concluded that the union’s assertion that it collected and used personal information from motor vehicle records for litigation — a permissible purpose under the DPPA — did not overcome the lower court’s finding that it collected and used the information for impermissible labor-organizing activities.

In 2002, UNITE launched a drive to organize Cintas employees. A major component of the drive consisted of identifying potential legal claims against Cintas. UNITE’s plan included making house calls to Cintas employees who might be reluctant to talk to union organizers at work for fear of retaliation by Cintas management. UNITE compiled lists of names and addresses for Cintas employees using a variety of tactics. One such tactic, known as “tagging,” required union organizers to observe cars entering Cintas parking lots, record license plate numbers and access state motor vehicle records relating to those plate numbers. UNITE tagged between 1,758 and 2,005 Cintas employees.

In 2004, a group of Cintas employees who had been tagged filed a class action lawsuit in the U.S. District Court for the Eastern District of Pennsylvania alleging violations of the DPPA, which provides that 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 . . . .” 18 U.S.C. § 2724(a). The district court granted summary judgment in favor of ten plaintiffs and ruled that each of the plaintiffs was entitled to a liquidated damages award of $2,500, but not punitive damages. Both parties appealed.

On appeal, UNITE argued that the district court misapplied the DPPA and failed to realize that the statute allowed it to obtain and use the employees’ motor vehicle record information “in anticipation of litigation” and/or when “acting on behalf of a Federal, State or local agency in carrying out its functions.” The plaintiffs argued that they each should have been awarded punitive damages and liquidated damages in the amount of $5,000; $2,500 for the unauthorized access and $2,500 for the subsequent unauthorized use of their personal information, which they contended constituted separate violations of the DPPA.

The Third Circuit rejected UNITE’s principal argument, finding that “[b]ecause UNITE obtained and used the confidential information for an impermissible purpose – union organizing – it does not matter what other permissible purpose UNITE may have had.” The court similarly rejected UNITE’s other arguments that liquidated damages should not have been awarded absent actual damages and that liability should be contingent on proof that the union knew its actions were impermissible.

Addressing the plaintiffs’ cross-appeal, the Third Circuit agreed that an award of punitive damages may be permissible under the DPPA and remanded the case to the district court for further proceedings on the issue of damages. The court stated that “where there is a genuine issue of material fact regarding the willfulness or recklessness of a defendant’s conduct, we hold that the Seventh Amendment requires a trial by jury on the issue of punitive damages under the DPPA.” The court, however, rejected the plaintiffs’ argument that they should be entitled to $5,000 each in liquidated damages. The court noted that Congress anticipated that “in most cases, a defendant who obtained a motor vehicle record would put it to some use” and enlarging the statute’s liquidated damages award based on such use “would effectively result in a minimum award of $5,000 for every violation of the DPPA . . . .”