Harris v. Mexican Specialty Foods
The Fair Credit Reporting Act (FCRA) contains important provisions for protecting consumer privacy, ensuring the accuracy of credit reports, and discouraging identity theft. When a business violates those provisions, the FCRA makes them liable for between $100 and $1000 for each violation. The point of this “statutory damages” provision is to deter violations by businesses by making them costly. In this case, the corporate defendants argued that these “statutory damages” provisions were unconstitutional under the Due Process Clause because they were vague and imposed excessive penalties. A federal district court in Alabama agreed. Its ruling would have set a dangerous precedent by expanding the substantive due process review of punitive damages into liability that is defined by statute.
As appellate counsel, Public Citizen argued to the U.S. Court of Appeals for the Eleventh Circuit that statutory damages up to $1000 are well within Congress’s prerogative to protect consumers, and we noted that the district court’s reasoning would render a large range of consumer protection laws unconstitutional because they, too, contain statutory damages provisions.
The court of appeals agreed and upheld FCRA’s statutory damages provision.