United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 6, 2001 Decided April 13, 2001

No. 00-1141

Trans Union Corporation,
Petitioner

v.

Federal Trade Commission,
Respondent

On Petition for Review of an Order of the
Federal Trade Commission

Roger L. Longtin argued the cause for petitioner. With him
on the brief was Stephen L. Agin.

Lawrence DeMille-Wagman, Attorney, Federal Trade
Commission, argued the cause for respondent. With him on
the brief were Debra A. Valentine, General Counsel, and
John F. Daly, Assistant General Counsel.


Before: Edwards, Chief Judge, Ginsburg and Tatel,
Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Tatel, Circuit Judge: Petitioner, a consumer reporting
agency, sells lists of names and addresses to target market-
ers--companies and organizations that contact consumers
with offers of products and services. The Federal Trade
Commission determined that these lists were "consumer re-
ports" under the Fair Credit Reporting Act and thus could no
longer be sold for target marketing purposes. Challenging
this determination, petitioner argues that the Commission's
decision is unsupported by substantial evidence and that the
Act itself is unconstitutional. Because we find both argu-
ments without merit, we deny the petition for review.

I

Petitioner Trans Union sells two types of products. First,
as a credit reporting agency, it compiles credit reports about
individual consumers from credit information it collects from
banks, credit card companies, and other lenders. It then
sells these credit reports to lenders, employers, and insurance
companies. Trans Union receives credit information from
lenders in the form of "tradelines." A tradeline typically
includes a customer's name, address, date of birth, telephone
number, Social Security number, account type, opening date
of account, credit limit, account status, and payment history.
Trans Union receives 1.4 to 1.6 billion records per month.
The company's credit database contains information on 190
million adults.

Trans Union's second set of products--those at issue in this
case--are known as target marketing products. These con-
sist of lists of names and addresses of individuals who meet
specific criteria such as possession of an auto loan, a depart-
ment store credit card, or two or more mortgages. Market-
ers purchase these lists, then contact the individuals by mail
or telephone to offer them goods and services. To create its
target marketing lists, Trans Union maintains a database
known as MasterFile, a subset of its consumer credit data-


base. MasterFile consists of information about every con-
sumer in the company's credit database who has (A) at least
two tradelines with activity during the previous six months, or
(B) one tradeline with activity during the previous six months
plus an address confirmed by an outside source. The compa-
ny compiles target marketing lists by extracting from Master-
File the names and addresses of individuals with characteris-
tics chosen by list purchasers. For example, a department
store might buy a list of all individuals in a particular area
code who have both a mortgage and a credit card with a
$10,000 limit. Although target marketing lists contain only
names and addresses, purchasers know that every person on
a list has the characteristics they requested because Trans
Union uses those characteristics as criteria for culling individ-
ual files from its database. Purchasers also know that every
individual on a target marketing list satisfies the criteria for
inclusion in MasterFile.

The Fair Credit Reporting Act of 1970 ("FCRA"), 15
U.S.C. ss 1681, 1681a-1681u, regulates consumer reporting
agencies like Trans Union, imposing various obligations to
protect the privacy and accuracy of credit information. The
Federal Trade Commission, acting pursuant to its authority
to enforce the FCRA, see 15 U.S.C. s 1681s(a), determined
that Trans Union's target marketing lists were "consumer
reports" subject to the Act's limitations. The FCRA defines
"consumer report" as:

[A]ny written, oral, or other communication of any infor-
mation by a consumer reporting agency bearing on a
consumer's credit worthiness, credit standing, credit ca-
pacity, character, general reputation, personal character-
istics, or mode of living which is used or expected to be
used or collected in whole or in part for the purpose of
serving as a factor in establishing the consumer's eligibil-
ity for--

(A) credit or insurance to be used primarily for per-
sonal, family, or household purposes;

(B) employment purposes; or


(C) any other purpose authorized under section 1681b
of this title.

15 U.S.C. s 1681a(d)(1). Finding that the information Trans
Union sold was "collected in whole or in part by [Trans
Union] with the expectation that it would be used by credit
grantors for the purpose of serving as a factor in establishing
the consumer's eligibility for one of the transactions set forth
in the FCRA," and concluding that target marketing is not an
authorized use of consumer reports under section 1681b, In re
Trans Union Corp., 118 F.T.C. 821, 891 (1994), the Commis-
sion ordered Trans Union to stop selling target marketing
lists, id. at 895.

Trans Union petitioned for review. In Trans Union Corp.
v. FTC, 81 F.3d 228 (D.C. Cir. 1996) ("Trans Union I"), we
agreed with the Commission that selling consumer reports for
target marketing violates the Act. Id. at 233-34. We never-
theless set aside the Commission's determination that Trans
Union's target marketing lists amounted to consumer reports.
Id. at 231-33. The Commission, we held, failed to justify its
finding that Trans Union's lists, by conveying the mere fact
that consumers had a tradeline, were communicating informa-
tion collected for the purpose of determining credit eligibility.
We found that the Commission had failed to provide evidence
to support the proposition that "the mere existence of a
tradeline, as distinguished from payment history organized
thereunder," was used for credit-granting decisions or was
intended or expected to be used for such decisions. Id. at
233. (The parties' arguments in Trans Union I and in the
proceedings on remand focused on the relevance of the
information in the company's lists to consumer eligibility for
credit; accordingly, the information's relevance to the other
uses the statute lists--such as determining eligibility for
insurance and employment--are not at issue in this case. See
In re Trans Union Corp., Opinion of the Commission, No.
9255, slip op. at 16 n.20 (Feb. 10, 2000) ("FTC Opinion").)

On remand, following extensive discovery, more than a
month of trial proceedings, and an initial decision by an
Administrative Law Judge, the Commission found that Trans


Union's target marketing lists contain information that credit
grantors use as factors in granting credit. Accordingly, the
Commission concluded, the lists are "consumer reports" that
Trans Union may not sell for target marketing purposes.
FTC Opinion at 33. The Commission also rejected Trans
Union's argument that such a restriction would violate its
First Amendment rights. Applying intermediate scrutiny,
the Commission found that the government has a substantial
interest in protecting private credit information, that the
FCRA directly advances that interest, and that the Act's
restrictions on speech are narrowly tailored. Id. at 37-52.
The Commission thus ordered Trans Union to "[c]ease and
desist from distributing or selling consumer reports, including
those in the form of target marketing lists, to any person
unless [the company] has reason to believe that such person
intends to use the consumer report for purposes authorized
under Section [1681b] of the Fair Credit Reporting Act." In
re Trans Union Corp., Final Order, No. 9255 (Feb. 10, 2000).
Trans Union again petitions for review.

II

As we pointed out in Trans Union I, the first element of
the FCRA's definition of consumer report--"bearing on a
consumer's credit worthiness, credit standing, credit capacity,
character, general reputation, personal characteristics, or
mode of living," 15 U.S.C. s 1681a(d)(1)--"does not seem very
demanding," for almost any information about consumers
arguably bears on their personal characteristics or mode of
living. See 81 F.3d at 231. Indeed, Trans Union does not
challenge the Commission's conclusion that the information
contained in its lists meets this prong of the definition of
consumer report.

Whether the company's target marketing lists qualify as
consumer reports thus turns on whether information they
contain "is used or expected to be used or collected in whole
or in part for the purpose of serving as a factor in establish-
ing the consumer's eligibility for [credit]." 15 U.S.C.
s 1681a(d)(1). According to the Commission, "a factor in


establishing the consumer's eligibility for [credit]," id., in-
cludes any type of information credit grantors use in their
criteria for "prescreening" or in "credit scoring models." See
FTC Opinion at 16-17. "Prescreening" involves selecting
individuals for guaranteed offers of credit or insurance. See
id. at 18; see also Trans Union I, 81 F.3d at 234 (defining
"prescreening" as "the sale of a list of people preselected for
credit worthiness by some specified criteria, where the buyer
of the list agrees in advance to make a firm offer of credit to
each listed person"). "Credit scoring models" are statistical
models for predicting credit performance that are developed
by observing the historical credit performance of a number of
consumers and identifying the consumer characteristics that
correlate with good and bad credit performance. See FTC
Opinion at 17. Applying its prescreening/credit scoring mod-
el standard, the Commission found that Trans Union's lists
contain the type of information " 'used' and/or 'expected to be
used' ... as a factor in establishing a consumer's eligibility
for credit." Id. at 15; see also id. n.19.

Trans Union urges us to reject the Commission's interpre-
tation of the Act in order to avoid what the company calls
"serious constitutional questions." Pet'r Opening Br. at 9.
In support, it cites DeBartolo Corp. v. Florida Gulf Coast
Building & Construction Trades Council, where the Supreme
Court refused to defer to the NLRB's interpretation of a
provision of the NLRA because the Court believed it raised
serious First Amendment problems. 485 U.S. 568, 574-77
(1988). But as we demonstrate in Section III, infra, Trans
Union's constitutional arguments are without merit, so we
have no basis for rejecting the Commission's statutory inter-
pretation on that ground.

Nor has Trans Union offered a basis for questioning the
Commission's statutory interpretation on other grounds. The
company does not mention the Commission's interpretation of
the statute in the "Issues Presented For Review" section of
its brief. Cf. Fed. R. App. P. 28(a)(5) (requiring that appel-
lants' and petitioners' briefs state the issues presented for
review). Although scattered language in the brief hints at a


statutory interpretation challenge, that language appears in a
section entitled "The Record Does Not Support The Conclu-
sion Reached By The Commission." Trans Union has thus
failed to put the Commission on notice that it faced a non-
constitutional challenge to its interpretation of the statute.

We have the same reaction to the brief's occasional sugges-
tions that the Commission's decision was arbitrary and capri-
cious. Not only do these suggestions appear in a section
entitled "The Commission's Interpretation Of FCRA Raises
Serious Constitutional Questions," see, e.g., Pet'r Opening Br.
at 19 (referring to "illogical contradictions"), but the list of
issues presented for review neither mentions the arbitrary
and capricious standard nor otherwise questions the reason-
ableness of the Commission's decision.

We thus turn to the one non-constitutional argument that
Trans Union clearly mounts: that the Commission's decision
is unsupported by substantial evidence. A footnote to the
title of this portion of its brief states:

The Order is replete with statements unsupported by the
evidence.... The word limitation of [Federal Rule of
Appellate Procedure] 32(a)(7) makes it impossible to ad-
dress each such misstatement here. It is the responsibility
of the Commission's counsel, however, to ensure that the
Court is not misled by the statements in the Order not
supported by the evidence.

Id. at 21 n.7. To bring a substantial evidence challenge,
however, Trans Union must do more than assert generally
that the decision is unsupported by substantial evidence. It
must identify the specific findings it challenges and demon-
strate that each finding is either unsupported by evidence or,
because the Commission unreasonably discounted contrary
evidence, unsupported by "the record in its entirety." See
Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).
The 14,000 words permitted by Rule 32(a)(7) are more than
enough to accomplish this task.

Instead of challenging the Commission's findings regarding
specific target marketing products, Trans Union points to


evidence relating to the general question of whether the
information in its target marketing lists is used to determine
credit worthiness. This is not the question before us. As we
indicate above, the Commission interprets "factor in estab-
lishing the consumer's eligibility for credit," 15 U.S.C.
s 1681a(d)(1), to include any information considered by lend-
ers in prescreening, which, as two witnesses testified, can
involve consideration of criteria other than credit worthiness,
e.g., whether a given consumer is likely to respond to an offer
of credit. Because Trans Union has not challenged the
Commission's interpretation of the statute, its argument that
the information the company sells is not actually used to
determine credit worthiness is beside the point. Moreover,
Trans Union cites no testimony refuting the Commission's
finding that the information in its target marketing lists is
used in prescreening.

Not only has Trans Union thus failed to mount a proper
substantial evidence challenge to the Commission's finding
that lenders take list information into account in credit mod-
els and prescreening, but we have no doubt that the decision
does find support in the record. Consider, for example,
Trans Union's "Master File/Selects" product line, which al-
lows marketers to request lists based on any of five catego-
ries of information: (1) credit limits (e.g., consumers with
credit cards with credit limits over $10,000), (2) open dates of
loans (e.g., consumers who took out loans in the last six
months), (3) number of tradelines, (4) type of tradeline (e.g.,
auto loan or mortgage), and (5) existence of a tradeline. The
Commission cites testimony and other record evidence that
support its finding that lenders consider each of these five
categories of information in prescreening or credit scoring
models. Beginning with credit limits, the Commission cites
the testimony of a statistician who builds credit scoring
models. FTC Opinion at 19. That witness explained that
scoring models rely in part on consumer utilization of credit,
calculated by dividing a consumer's current outstanding bal-
ance by the consumer's credit limit. To support its finding
regarding open dates of loans, the Commission relied on the
testimony of a vice president of a company that builds credit


scoring models. Id. According to that witness, some scoring
models use the open date of the oldest tradeline in a consum-
er's credit file as a predictive characteristic. The witness also
testified that some credit scoring models use the date of the
most recently opened tradeline to determine credit risk. To
support its finding that information about the number of
tradelines in a consumer's credit file is a consumer report, the
Commission cites the testimony of a vice president in charge
of direct mail processing for a bank's credit card department
who explained that, in its credit making decisions, her bank
considers the number of tradelines consumers possess. Id. at
20 n.30. The Commission also points to record evidence
demonstrating that Trans Union itself uses the number of
tradelines as a predictive characteristic in its credit scoring
models. Id. at 20. As to the type of tradeline, the Commis-
sion cites the testimony of representatives of companies that
design credit models who explained that some credit scoring
models, including two used by Trans Union, take into account
possession of a bank card. FTC Opinion at 21-22. One
witness testified that Trans Union scoring models also consid-
er possession of a finance company loan to be a predictive
characteristic. Another witness, this one representing a
credit card company, testified that his company's scoring
models assign points for possession of a mortgage, retail
tradeline, or bank card. Id. at 21.

The record also contains sufficient evidence to support the
Commission's resolution of the issue remanded by Trans
Union I: whether mere existence of a tradeline is "a factor in
credit-granting decisions." 81 F.3d at 233. An employee of a
bank that issues credit cards testified that to be eligible for
credit, an individual must have at least one tradeline. FTC
Opinion at 25. The vice president of credit scoring at
another credit card issuer testified that the very first ques-
tion her company asks in prescreening is whether the con-
sumer has a tradeline that has been open for at least a year.
Challenging the implications of this testimony, Trans Union
argues that banks ask whether consumers have tradelines not
because the existence of a tradeline is itself a factor in
determining credit eligibility, but because banks want to


determine whether there is enough information in consumer
files to make credit eligibility determinations. This may be
true. But as we explain above, our task is limited to deter-
mining whether substantial record evidence supports the
Commission's finding that banks consider the existence of a
tradeline as a factor in prescreening or credit models. Be-
cause the record contains such evidence, we have no basis for
questioning the Commission's decision.

Trans Union has identified one potentially troubling incon-
sistency in the Commission's decision. As the company
points out, record evidence demonstrates that lenders consid-
er names and addresses when prescreening consumers for
guaranteed offers of credit, yet the Commission does not
prohibit the sale of names and addresses for target marketing
purposes. Regarding addresses, the Commission's opinion
says, "[a]lthough some lenders will not extend credit to
consumers with a P.O. Box address, we do not find that the
P.O. Box feature bears on 'credit worthiness, credit standing,
credit capacity, character, general reputation, personal char-
acteristics or mode of living.' " Id. at 31 n.50. It is not clear,
however, why receiving mail at a post office should not be
considered an aspect of an individual's "mode of living." We
need not resolve this issue, however, because Trans Union
presents neither an arbitrary and capricious nor a statutory
interpretation challenge to the Commission's failure to pro-
hibit the sale of names and addresses. See supra at 6-7.

Nor must we resolve any inconsistency between the Com-
mission's decision in this case and a 1993 consent agreement
between the Commission and a Trans Union competitor,
TRW (now Experian). In contrast to the Commission's deci-
sion here, that agreement allowed TRW to sell information
about consumers' ages to target marketers. Again, although
this might suggest that the Commission has acted arbitrarily
and capriciously in treating similarly situated entities differ-
ently, Trans Union has not made such a challenge. The
Commission thus seems correct that "[t]he TRW Consent is
not before us in this matter and it is without precedential
effect on this opinion." FTC Opinion at 16 n.22.


III

Trans Union's constitutional challenge consists of two argu-
ments. It claims first that the FCRA is vague, thus running
afoul of the due process guarantee of the Fifth Amendment.
Trans Union also argues that the statute violates the free
speech guarantee of the First Amendment because it restricts
its ability to disseminate information.

Beginning with the Fifth Amendment challenge, we are
guided by Village of Hoffman Estates v. Flipside, Hoffman
Estates, Inc., 455 U.S. 489, 498 (1982). "[L]aws," the Court
said, must not only "give the person of ordinary intelligence a
reasonable opportunity to know what is prohibited," but in
order to prevent "arbitrary and discriminatory enforcement,"
they must also "provide explicit standards for those who
apply them." Id. (quoting Grayned v. City of Rockford, 408
U.S. 104, 108-09 (1972)). Emphasizing that these principles
should not "be mechanically applied," the Court held that
"economic regulation is subject to a less strict vagueness test
because its subject matter is often more narrow, and because
businesses, which face economic demands to plan behavior
carefully, can be expected to consult relevant legislation in
advance of action." Id. The "regulated enterprise," the
Court added, "may have the ability to clarify the meaning of
the regulation by its own inquiry, or by resort to an adminis-
trative process." Id. Finally, "the consequences of impreci-
sion are qualitatively less severe" when laws have "scienter
requirement[s]" and "civil rather than criminal penalties."
Id. at 499.

Applying this standard, we see no merit in Trans Union's
vagueness argument. To begin with, because the FCRA's
regulation of consumer reporting agencies is economic, it is
subject to "a less strict vagueness test." Id. at 498. More-
over, Trans Union has "the ability to clarify the meaning of
the [FCRA]," id., through the Commission's advisory opinion
procedures. See 16 C.F.R. ss 1.1-1.4 (establishing general
procedures for obtaining advisory opinions); id. s 2.41(d)
(establishing procedures for obtaining guidance regarding
compliance with FTC orders). Selectively quoting from the


Commission's regulations, the company disputes the useful-
ness of advisory opinions, suggesting that they can be
changed at any time and that "the Commission expressly
reserves the right upon rescission of an earlier opinion to
commence an enforcement proceeding." Pet'r Reply Br. at
10. The relevant regulation states as follows (the sentences
Trans Union omits are in italics):

Any advice given by the Commission is without prejudice
to the right of the Commission to reconsider the ques-
tions involved and, where the public interest requires, to
rescind or revoke the action. Notice of such rescission
or revocation will be given to the requesting party so
that he may discontinue the course of action taken
pursuant to the Commission's advice. The Commission
will not proceed against the requesting party with re-
spect to any action taken in good faith reliance upon the
Commission's advice under this section, where all the
relevant facts were fully, completely, and accurately
presented to the Commission and where such action was
promptly discontinued upon notification of rescission or
revocation of the Commission's approval.

16 C.F.R. s 1.3(b) (emphasis added). Although the next
subsection of the regulation states that "[a]dvice rendered by
the staff is without prejudice to the right of the Commission
later to rescind the advice and, where appropriate, to com-
mence an enforcement proceeding," id. s 1.3(c), the portion of
the regulation omitted by Trans Union makes quite clear that
the company can safely rely on advisory opinions without fear
of penalty should the Commission later change its mind.

The FCRA does not fit quite so comfortably under the
other Hoffman Estates criteria. Although the Act does con-
tain a clear scienter requirement for the imposition of civil
fines, see, e.g., 15 U.S.C. s 1681s(a)(2)(A) ("knowing"), it also
provides that anyone who negligently violates the Act may be
liable to injured consumers for actual damages. Id.
s 1681o(a). The statute also authorizes criminal penalties.
Id. s 1681r (providing for possible imprisonment for "[a]ny
officer or employee of a consumer reporting agency who


knowingly and willfully provides information concerning an
individual from the agency's files to a person not authorized
to receive that information"). Even given these distinctions,
however, because of the extremely clear process for "clari-
fy[ing] the meaning of the regulation," Hoffman Estates, 455
U.S. at 498, Trans Union simply does not face a due process
risk of prosecution for conduct it could not have known to be
illegal.

Trans Union's First Amendment challenge fares no better.
Banning the sale of target marketing lists, the company says,
amounts to a restriction on its speech subject to strict scruti-
ny. Again, Trans Union misunderstands our standard of
review. In Dun & Bradstreet, Inc. v. Greenmoss Builders,
Inc., 472 U.S. 749 (1985), the Supreme Court held that a
consumer reporting agency's credit report warranted reduced
constitutional protection because it concerned "no public is-
sue." Id. at 762. "The protection to be accorded a particular
credit report," the Court explained, "depends on whether the
report's 'content, form, and context' indicate that it concerns
a public matter." Id. n.8. Like the credit report in Dun &
Bradstreet, which the Supreme Court found "was speech
solely in the interest of the speaker and its specific business
audience," id. at 762, the information about individual con-
sumers and their credit performance communicated by Trans
Union target marketing lists is solely of interest to the
company and its business customers and relates to no matter
of public concern. Trans Union target marketing lists thus
warrant "reduced constitutional protection." Id. n.8.

We turn then to the specifics of Trans Union's First
Amendment argument. The company first claims that nei-
ther the FCRA nor the Commission's Order advances a
substantial government interest. The "Congressional find-
ings and statement of purpose" at the beginning of the FCRA
state: "There is a need to insure that consumer reporting
agencies exercise their grave responsibilities with ... respect
for the consumer's right to privacy." 15 U.S.C. s 1681 (a)(4).
Contrary to the company's assertions, we have no doubt that


this interest--protecting the privacy of consumer credit infor-
mation--is substantial.

Trans Union next argues that Congress should have chosen
a "less burdensome alternative," i.e., allowing consumer re-
porting agencies to sell credit information as long as they
notify consumers and give them the ability to "opt out."
Pet'r Opening Br. at 43-44. Because the FCRA is not
subject to strict First Amendment scrutiny, however, Con-
gress had no obligation to choose the least restrictive means
of accomplishing its goal.

Finally, Trans Union argues that the FCRA is underinclu-
sive because it applies only to consumer reporting agencies
and not to other companies that sell consumer information.
But given consumer reporting agencies' unique "access to a
broad range of continually-updated, detailed information
about millions of consumers' personal credit histories," FTC
Opinion at 1, we think it not at all inappropriate for Congress
to have singled out consumer reporting agencies for regula-
tion. As we explained in Blount v. SEC, "a regulation is not
fatally underinclusive simply because an alternative regula-
tion, which would restrict more speech or the speech of more
people, could be more effective." 61 F.3d 938, 946 (D.C. Cir.
1995). The primary purpose of underinclusiveness analysis is
to "ensure that the profferred state interest actually underlies
the law, [so] a rule is struck for underinclusiveness only if it
cannot fairly be said to advance any genuinely substantial
governmental interest because it provides only ineffective or
remote support for the asserted goals, or limited incremental
support." Id. (internal citations omitted). To survive a First
Amendment underinclusiveness challenge, therefore, "neither
a perfect nor even the best available fit between means and
ends is required." Id. The FCRA easily satisfies this stan-
dard.

Trans Union contends that the statute is underinclusive for
another reason, i.e., because it allows the sale of consumer
reports for the purpose of guaranteed offers of credit or
insurance. Trans Union I disposes of this argument:


[B]eing singled out for a firm offer of credit is exactly the
sort of thing the Act seeks to promote, and a purpose for
which it is quite reasonable to infer the consumer's
implicit waiver or consent. Moreover, prescreening and
the guaranteed offers of credit it spawns can only take
place through the use of consumer reports, whereas the
use of credit data for non-credit-related mailings is at
most helpful to those ends.

81 F.3d at 234.

IV

Having considered and rejected Trans Union's other argu-
ments, we deny the petition for review.

So Ordered.