April 24, 2012

John Stone, Senior Attorney, National Legal Research Group

Title IX of the Education Amendments of 1972 prohibits gender‑based discrimination by federally funded educational institutions. It provides that "[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance." 20 U.S.C. § 1681(a).  In Jackson v. Birmingham Board of Education, 544 U.S. 167 (2005), the Supreme Court held that retaliation against a person because that person has complained of sex discrimination is also a form of gender‑based discrimination actionable under Title IX.

On its first occasion to say what a plaintiff must prove to prevail on a retaliation claim under Title IX, the Ninth Circuit has reinstated a case for a plaintiff whose claim had been dismissed on summary judgment by a federal district court.  Emeldi v. Univ. of Or., No. 10-35551, 2012 WL 933821 (9th Cir. filed Mar. 21, 2012). As other federal circuits have done, the Ninth Circuit applied the same framework as is used to decide retaliation claims brought against employers under Title VII of the Civil Rights Act of 1964.  See, e.g., Papelino v. Albany Coll. of Pharm. of Union Univ., 633 F.3d 81, 91B92 (2d Cir. 2011) (applying the Title VII framework to a Title IX retaliation claim); Frazier v. Fairhaven Sch. Comm., 276 F.3d 52, 67 (1st Cir. 2002) (same).

According to that framework, a plaintiff who lacks direct evidence of retaliation must first make out a prima facie case of retaliation by showing that he or she was engaged in protected activity, he or she suffered an adverse action, and there was a causal link between the two.  Once the plaintiff has made the threshold prima facie showing, the defendant must articulate a legitimate, nonretaliatory reason for the challenged action; if the defendant does so, the plaintiff must then show that the reason is pretextual either directly, by persuading the court that a discriminatory reason more likely motivated the employer, or indirectly, by showing that the employer's proffered explanation is unworthy of credence.

In Emeldi, the plaintiff was a graduate student who alleged that she had been retaliated against because she had complained about bias based on gender. Her complaints were on such matters as the lack of women on the faculty, the failure to give female students the same support and attention as male doctoral candidates received, and the fact that male students had opportunities that were not available to female students, such as access to more and better resources, including more office space and better technology for collecting data.

The court found that the plaintiff's complaints to the Dean of the College of Education and, later, to an administrator about gender‑based institutional bias and about a male professor's—her dissertation committee chair's—unequal treatment of her in particular and of female graduate students in general constituted "protected activity" under Title IX; moreover, the protected status of her alleged statements stayed intact whether or not she would ultimately be able to prove her underlying contentions about discrimination.

The Lawletter Vol 36 No 10

John Stone, Senior Attorney, National Legal Research Group

The Fourth Circuit Court of Appeals has upheld summary judgment granted in favor of a university medical school that had been sued by a dismissed medical student with attention deficit hyperactivity disorder ("ADHD").  Halpern v. Wake Forest Univ. Health Sci., 669 F.3d 454 (4th Cir. 2012).  The claims of disability discrimination were brought under the federal Rehabilitation Act of 1973, which prohibits discrimination against the disabled in programs or activities receiving federal financial assistance, and that part of the Americans with Disabilities Act ("ADA") that prohibits disability discrimination in places of "public accommodation," 42 U.S.C. §§ 12181–12189.

To the extent possible, the ADA and the Rehabilitation Act are construed to impose similar requirements.  Accordingly, despite the different language these statutes use, they require a plaintiff to demonstrate the same elements to establish liability.  In the relevant context of a student excluded from an educational program, to prove a violation of either the ADA or the Rehabilitation Act, a plaintiff must establish that he or she (1) has a disability; (2) is otherwise qualified to participate in the defendant's program; and (3) was excluded from the program on the basis of his or her disability.  If a person, due to his or her disability, requires a modification to meet the essential requirements to participate in an educational program and if the necessary modification is unreasonable, then that person is not "qualified" under the ADA and the Rehabilitation Act to participate in the program.  In Halpern, the dismissed student had a disability, but his claims fell because he was not otherwise qualified to participate in the medical school's program and the modification or accommodations he sought were found to be unreasonable.

From the defendant medical school's viewpoint, the problem was not the student's disability, per se, but his objectionable behavior that may well have stemmed from the disability.  To determine whether a plaintiff has satisfied the burden of establishing that he or she is qualified for an educational program, a court must decide whether the plaintiff has presented sufficient evidence to show (1) that he or she could satisfy the essential eligibility requirements of the program, that is, those requirements that bear more than a marginal relationship to the program at issue; and, if not, (2) whether any reasonable accommodation by the defendant would enable the plaintiff to meet these requirements.  For purposes of this analysis, the court in Halpern began with the premise that the University's professional judgment as to the medical student's ability to continue in the medical program with his ADHD and anxiety disorder and as to whether his proposed accommodations would effect substantial modifications to the program was entitled to deference.

The Lawletter Vol 36 No 9

Tim Snider, Senior Attorney, National Legal Research Group

The Supreme Court takes so few cases on writs of certiorari that it is remarkable that the Court in consecutive Terms has accepted and decided two cases involving arbitration of consumer disputes.  Last Term, the Court decided AT&T Mobility LLC v. Concepcion, 563 U.S. ___, 131 S. Ct. 1740 (2011), which held that the Federal Arbitration Act, 9 U.S.C. § 2, preempts California's judicial rule regarding the unconscionability of class arbitration waivers in consumer contracts.  This Term, the Court again took up arbitration, also in the context of consumer contracts, in CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012).

There, a group of consumers filed a class-action complaint in the U.S. District Court for the Northern District of California against the defendant credit card issuers, alleging, inter alia, violations of the Credit Repair Organizations Act ("CROA"), 15 U.S.C. §§ 1679B1679j.  The claims largely involved the defendants' allegedly misleading representation that the issuers' credit card could be used to rebuild poor credit and their assessment of multiple fees upon opening the accounts, which greatly reduced the advertised credit limit.  The defendants moved to compel arbitration in accordance with a provision in the consumers' contracts.  The district court denied the motion, and the Ninth Circuit affirmed.  Greenwood v. CompuCredit Corp., 615 F.3d 1204 (9th Cir. 2010). The Supreme Court reversed and remanded.

CROA sets out a statement that credit repair organizations must provide to consumers before any contract is executed.  15 U.S.C. § 1679c(a).  One sentence of the required statement reads, "'You have a right to sue a credit repair organization that violates the Credit Repair Organization Act.'"  Id.  CROA's nonwaiver provision states, "Any waiver by any consumer of any protection provided by or any right of the consumer under this subchapter—(1) shall be treated as void; and (2) may not be enforced by any Federal or State court or any other person."  Id. § 1679f(a).  The Ninth Circuit reasoned that the disclosure provision gives consumers the "right to sue," which "clearly involves the right to bring an action in a court of law."  Greenwood, 615 F.3d at 1208.  Because the nonwaiver provision prohibits the waiver of "any right of the consumer under this subchapter," the arbitration agreement—which waived the right to bring an action in a court of law—could not be enforced.

The Supreme Court rejected the premise that the disclosure provision affords consumers a right to bring an action in a court of law.  The Court concluded that the defendants were required only to provide consumers with the mandated statement, which referred to rights afforded elsewhere in the statute.  The statute provides for procedures that must be utilized if and when the case finds its way into court, but that does not mean that Congress intended to supplant the availability of arbitration under the Federal Arbitration Act ("FAA").  If Congress had intended to do so, it would have done so explicitly as it has done elsewhere, particularly inasmuch as arbitration is a favored means of resolving disputes.

The Lawletter Vol 36 No 6

John Stone, Senior Attorney, National Legal Research Group

The California Invasion of Privacy Act ("Act"), Cal. Penal Code § 632, prohibits unconsented-to recording or monitoring, regardless of the content of the conversation or the purpose of the monitoring.  The law is intended to protect rights that are separate and distinct from the right to prevent the disclosure of improperly obtained private information, and it requires the assent of all parties to a communication before another person may listen.  An actionable violation of the Act occurs the moment a surreptitious recording or eavesdropping takes place, regardless of whether it is later disclosed.

In Kight v. CashCall, Inc., 200 Cal. App. 4th 1377, 2011 WL 5829678 (Nov. 21, 2011), the court reversed a summary judgment for the defendant company, finding that a lending corporation was potentially liable for violating the Act's prohibition against eavesdropping on telephone calls, without the consent of all parties, if it had directed one or more of its employees to secretly listen to a telephone conversation between a borrower and another employee.  The legislature enacted the Act prohibiting the recording of confidential communications to ensure an individual's right to control the firsthand dissemination of a "confidential communication," and the legislature further expressed its intent to strongly protect an individual's privacy rights in electronic communications.

During the relevant period for the class action, CashCall randomly monitored 547 calls to and from the servicing department:  225 inbound calls and 322 outbound calls.  The calls were monitored for quality control purposes to ensure that CashCall employees were following CashCall's policies and procedures and applicable laws governing debt collections. Supervisors monitored calls either electronically by using software or by physically sitting next to the representative and "plugging" in to the call.  For purposes of the summary adjudication motion, it was assumed that the calls were not recorded; the supervisor would listen to the call while the conversation was occurring.

While in many cases of incoming calls the customer heard the familiar recording that "[t]his call may be monitored or recorded for quality control purposes," it was not always the case, and it was never the case on outgoing calls.  At the beginning of the borrower relationship, CashCall generally provided written notice to all borrowers that information disclosed to CashCall would be disseminated to "those employees who need to know that information to provide products or services to you."

A "person" is defined in the Act broadly to include business entities like the defendant in Kight.  Based on the facts before it, the appellate court ruled that the lender corporation had potentially violated the Act's prohibition against eavesdropping on telephone calls if the borrowers had had a reasonable expectation that their telephone conversations with its employees were not being secretly overheard by other employees, even if the borrowers knew that the information in their calls would eventually be disseminated to other employees.

January 3, 2012

John Stone, Senior Attorney, National Legal Research Group

It should not come as a surprise to most people that when an individual gets a driver's license from a State, he or she necessarily gives the State some personal information that is then stored in a database for use by the Division of Motor Vehicles ("DMV"). Typically this information includes name, address, telephone number, vehicle description, Social Security number, some medical information, and a photograph. What may not be so commonly known is that the States legally can and do turn around and sell that information to individuals, businesses, and other governmental entities.

There are some federal statutory limits on the States' ability to sell DMV driver record information.  In a recent case, Howard v. Criminal Information Services, 654 F.3d 887 (9th Cir. 2011), the Ninth Circuit heard appeals from two essentially identical class actions that had been filed in two different states, by different groups of plaintiffs, seeking damages on the ground that their personal information had been obtained by defendant companies in violation of the Driver's Privacy Protection Act ("DPPA"), 18 U.S.C. §§ 2721–2725. That statute provides that personal information from state driver's license databases can be obtained, disclosed, or used only for certain specified purposes. The 14 enumerated permissible purposes include, in addition to those directly related to motor vehicles, such purposes as court or law enforcement functions; verification of information by businesses, including employers; research activities; and insurance purposes.  All in all, the list and scope of permissible purposes for obtaining DMV information on drivers is rather broad, and it is little wonder that companies decide to mine these databases.

In the case before the Ninth Circuit, a newspaper company had used the information in reporting stories involving the operation or safety of motor vehicles. Another company had found the information helpful in performing background checks; it used the information to verify personal information submitted by the person about whom the background check was being performed.  Another of the defendants had used the information to perform research about motor vehicles. A parking lot management business had used the information to check information provided by its customers and to provide notice to owners of towed or impounded vehicles. These businesses had determined that it is neither efficient nor cost‑effective to request records piecemeal—that is, individually, each time they had a need for the information—or to be limited to getting the information during business hours when the state agency is open. Instead, they purchased the entire database from the State "in bulk" so as to be able to access specific information as and when the need arose.

Thus, in the consolidated cases, each of the defendants had purchased driver record information in advance and in bulk so that it would have the information available for its possible future use. The plaintiffs did not complain that the ultimate use of the information by any of the defendants had been for a purpose not permitted under the DPPA. They argued, however, that the DPPA forbids bulk purchasing of drivers' personal information for future use, because obtaining the information for future use is not itself a permitted purpose under the DPPA.  Joining other courts that had dealt with similar claims, the Ninth Circuit concluded that the defendants' actions, sometimes referred to as "stockpiling" information, were not unlawful under the DPPA, and it affirmed the dismissal of the actions by the federal district courts.