Capabilities

American Bankers Association v. Gould

American Bankers Association
2005

Arnold & Porter LLP represented an industry trade group as an amicus in another key preemption case in California that was resolved in favor of both federally chartered and state-chartered financial institutions. In American Bankers Association v. Gould, 412 F.3d 1081 (9th Cir. 2005), the Ninth Circuit ruled that the comprehensive privacy statute enacted by the California legislature in 2003, commonly known as "SB1," was preempted by the federal Fair Credit Reporting Act ("FCRA") to the extent that it purported to restrict the sharing among affiliated corporations of nonpublic personal information. The Ninth Circuit thereby reversed an initial ruling by the District Court for the Eastern District of California, which had found the statute not to be preempted based on a reading of the FCRA's preemption provisions as applicable only to information meeting the definition of a "consumer report." The Ninth Circuit disagreed, based on a more exacting analysis of the text of the FCRA and its legislative history, but also left open the possibility that SB1's restrictions on affiliate information-sharing might be applicable to a subset of information not covered by the FCRA's preemption provisions. On remand, in a decision issued in October 2005, the district court found that SB1 could not be "severed" based on any such subset of information and thus that "no portion of SB1's affiliate sharing provision survives." Am. Bankers Ass'n v. Lockyer, No. Civ.S04-0778, 2005 WL 2452798, at *3 (E.D. Cal. Oct. 4, 2005).

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