The opinion of the court was delivered by: POLLACK
The defendants, child adoption agencies, have separately moved for dismissal of the complaint herein on the ground that plaintiff has failed to state a claim upon which relief may be granted, Fed.R.Civ.P. 12(b)(6), or, alternatively, for summary judgment in their favor, pursuant to Fed.R.Civ.P. 56 and General Rule 9(g) of this Court. At issue is the question of first impression whether the Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681t, which became effective April 26, 1971, ("the Act" hereafter) applies to the activities and to the confidential information and reports of an adoption agency.
The background facts of this suit are not contested. Porter and his wife have three children and have attempted on several occasions to adopt a fourth child. Among the adoption agencies to which they applied were the four named defendants. The applications for adoption were filed with defendant Talbot in December 1969; defendant Sheltering Arms in August-November of 1970; defendant Windham in August 1970; and defendant Brookwood in August 1971. In each instance, the application was denied, as was the subsequent request addressed to each defendant for all information collected or used by the agency with respect to plaintiff and his wife. Plaintiff wrote to each of these agencies in November of 1971 for copies of any and all reports relating to his application.
Plaintiff seeks both actual and punitive damages claiming to be entitled thereto on the ground that the defendants willfully and wrongfully refused to make the requested disclosures to him in violation of the Act.
The purpose of the Fair Credit Reporting Act is to protect an individual from inaccurate or arbitrary information about himself in a consumer report that is being used as a factor in determining the individual's eligibility for credit, insurance or employment. 116 Cong.Rec. 36572 (1970). Congress ascertained a "need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." 15 U.S.C. § 1681(a)(4). The Act was designed to require consumer reporting agencies to
adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this [Act]. § 1681(b). (Emphasis supplied).
For the most part, the consumer reporting industry is comprised of credit bureaus, investigative reporting companies and other organizations whose business is the gathering and reporting of information about consumers for use by others in making a decision concerning whether to grant credit, underwrite insurance or employ the subject of such reports. F.T.C., Compliance with the Fair Credit Reporting Act, 4 CCH Consumer Credit Guide para. 11,302 (1971).
To advance this design, the Act provides a mechanism with which a consumer can determine what information has been gathered about him for submission to those engaged in commerce and can have the opportunity to correct any inaccuracies in that information. §§ 1681g-1681i; 116 Cong.Rec. 35941. The term "consumer" is broadly defined in the Act as an individual. § 1681a(c). Limitations are imposed on the uses to which the accumulated information may be put. § 1681f. The Act sets a time after which details must be deleted from the files. § 1681c. Willful failure to comply with the provisions of the Act, including those which specifically allow the consumer to examine and correct his file, exposes the credit reporting agency or user of information to civil liability, including actual and punitive damages. § 1681n. Negligent failure to comply may result in actual damages and the imposition of Court costs. § 1681 o.
The consumer reporting agency, to which the Act is directed, is defined as follows:
The term "consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports. § 1681a(f). (Emphasis added).
A finding that a prospective defendant fits within these definitional boundaries is requisite to the imposition of procedural requirements and possible liabilities contained in the Act.
Essentially, this definition contains four links. (1) The consumer reporting agency must act for monetary fees, dues, or on a cooperative non-profit basis; (2) it must regularly engage in whole or in part in gathering or evaluating information on consumers; (3) the purpose of such activity must be the distribution of information to third parties engaged in commerce; and (4) the agency must use a facility of interstate commerce to prepare or distribute the reports.
The Federal Trade Commission, which is vested with enforcement powers under the Act, § 1681s, has provided some preliminary interpretations of the Act, 4 CCH Consumer Credit Guide para. 11,301 et seq., to which the Court may refer for guidance. ...