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The U.S. Supreme Court Dec. 12 said it will not review a California Supreme Court decision that held the federal Fair Credit Reporting Act (FCRA) does not preclude a lawsuit alleging a debt collector disclosed medical records in violation of a California medical information privacy statute (Mortensen v. Brown, U.S., No. 11-434, review denied).
The high court action leaves standing a June decision in which the California Supreme Court reinstated claims brought against Stewart Mortensen, d/b/a Credit Bureau Services, alleging he violated California's Confidentiality of Medical Information Act (CMIA), Cal. Civ. Code §56 et seq., in sending personally identifiable family dental records to credit reporting agencies (see previous article).
The state high court said the FCRA provisions impose obligations on debt collectors that furnish information to credit bureaus, but those provisions do not evince an intent by Congress to preempt state laws that impose additional health information privacy obligations on, or provide for additional remedies against, debt collectors.
The court noted that the Consumer Credit Reporting Reform Act of 1996, which amended FCRA to add provisions applicable to “furnishers,” was passed nearly contemporaneously with the Health Insurance Portability and Accountability Act. HIPAA, the state supreme court continued, expressly allowed for more stringent state law regulation of health information privacy.
The court observed that 15 U.S.C. §1681t(b)(1)(F) addresses, and limits, the preemptive effect of the FCRA, and Section 1681s-2, added by the 1996 amendments, imposes a duty on furnishers to provide accurate information. It also dictates what they must do upon receiving official notice from a consumer reporting agency of a dispute concerning the completeness or accuracy of the information they have provided.
The state supreme court ruling reversed a January 2010 decision by a California appeals court that found a man whose medical records, along with those of his two minor children, were disclosed to credit reporting agencies could not pursue state law claims (see previous article).
The dispute arose out of an attempt by Robert Brown's dentist, Dr. Rolf Reinholds, to collect an alleged debt based on services Brown never received. The dentist gave Brown's dental charts and those of his two minor children—whose treatment was not at issue—to a debt collector, Mortensen, who then contacted Brown and sent him a copy of the dental charts as proof of the debt.
Brown insisted to Mortensen that he did not owe the dentist and complained that the charts contained confidential medical information. Over a period of about two years, Mortensen used and disclosed all of the dental charts, including the confidential medical information, to three consumer credit reporting agencies. Mortensen made this disclosure over Brown's protestations and in spite of his knowledge that the records contained confidential information, the court said.
Brown subsequently brought an action against Mortensen, Reinholds, and associated providers, alleging, among other things, a violation of the CMIA. The trial court dismissed Brown's claims against Mortensen, ruling that they were “impermissibly vague.” Brown's claims against the other parties were voluntarily dismissed.
The appeals court affirmed the trial court's ruling, disagreeing with the trial court's vagueness determination, but ruling that the FCRA provisions regulating furnishers preempted Brown's state law claim. The state high court, however, said the appeals court erred in failing to presume the state statute was not preempted.
The petition, filed in October, argued that the state supreme court erred in ruling Congress did not intend FCRA to preempt the remedies provided by CMIA and the state Consumer Credit Reporting Agencies Act, Cal. Civ. Code §1785.1 et seq. It asked the U.S. Supreme Court to rule that claims that are solely based on the furnishing of information to credit reporting agencies are preempted by FCRA.
The petition was filed by Charles Robert Messer and David J. Kaminski, with Carlson & Messer LLP, Los Angeles.
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