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Liu v. DeFelice, 1998 WL 404 935 (D. Mass.)


Although the court’s decision in this case concerns the issue of personal jurisdiction, a subject discussed in greater detail elsewhere, the basis of the invasion of privacy claim is worth noting here. In this case, the finding of jurisdiction, and, indeed, the substantive basis for the invasion of privacy claim raised was the New York defendant’s unauthorized accessing of credit information of a Massachusetts resident, through an on-line request to a New York credit agency.


Although the legal issue presented by this case was whether there is personal jurisdiction over the defendant, the case is noted here because of the subject of the dispute. The plaintiff claimed that a New York investigator was liable for invasion of privacy based on the investigator’s unauthorized acquisition of credit information from a credit reporting agency. The defendant obtained the information by submitting an on-line request to the credit agency, which was also located in New York. The Massachusetts plaintiff’s claim alleged violations of the Federal Fair Credit Reporting Act (FCRA), the state Consumer Credit Reporting Act, M.G.L. c. 93, §51, and the state Consumer Protection Act, M.G.L. c. 93A. The court ruled that a Massachusetts resident could bring an action against the New York investigator for obtaining information from a credit reporting agency which was also located outside of Massachusetts.

While asset investigations themselves are an age-old practice, the question which is now being asked is whether the power of the Internet will lead to changes in the laws governing them. Federal or state legislative restrictions would be an obvious, "macro" response. It can be argued that the finding of jurisdiction in this case is an example of how the legal system makes incremental, "micro" changes, where "webification" of a practice or a relationship makes such a substantial change that rules require adjustment.

To establish jurisdiction, the plaintiff had to satisfy the requirements of the Massachusetts long-arm statute, M.G.L. c. 223A, as well as constitutional due process requirements. The question before the court was whether the New York investigator’s on-line transaction with a New York credit reporting agency could be deemed to have caused "tortious injury by an act or omission in this Commonwealth," M.G.L. c. 223A, §3(c). The court agreed with the plaintiff’s argument that although the defendant’s "actions did not literally occur within Massachusetts . . . because he directed them at her, his actions were effectively performed here." The court declined to follow the lead of two other courts which declined to find jurisdiction, including the Third Circuit on substantially identical facts. The court said that "[n]either jurisdiction shares Massachusetts’ focus on the substantive nature of the tort involved, rather than the more formalistic consideration of the location of the parties." The court cited no authority for this characterization of Massachusetts personal jurisdiction law. It appears inconsistent with the Massachusetts long-arm statute provision in question, which does require that the tortious injury be caused by "an act or omission in this Commonwealth" (emphasis added). Other language in the opinion suggests that the court tried to justify ignoring the clear language of the statute by borrowing the notion of extraterritorial actions being "directed at" a resident, as a justification for finding jurisdiction.

Copyright SRBC 1998 up