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IN RE GRAND JURY PROCEEDINGS

April 25, 1980

In re GRAND JURY PROCEEDINGS; Application of (XYZ) TO QUASH SUBPOENA FOR PRODUCTION OF RECORDS. 1


The opinion of the court was delivered by: BIUNNO

On February 27, 1980, a grand jury subpoena issued from this court under its seal and signed by the clerk, at the request of the U.S. Attorney, directing (XYZ), a credit reporting company, to appear before the grand jury on March 11, 1980 and to produce certain documents consisting of the credit information in its possession regarding a number of individuals.

Discussions evidently ensued between (XYZ) and the U.S. Attorney in respect to the question whether the grand jury subpoena was an "order of a court having jurisdiction to issue such an order", in view of the fact that although signed by the clerk under the seal of the court, it was issued at the request of the U.S. Attorney and was not signed by a judge of the court.

 The question arises because of a provision in the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq., as added by Pub.L.91-508, which took effect April 24, 1971 (180 days after enactment).

 The congressional purpose, as stated, was

 
" * * * to a require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this (Act)."
 
See, 15 U.S.C. § 1681(b).

 Administrative enforcement powers to secure compliance with the Act is placed in the hands of the Federal Trade Commission (with exceptions not pertinent here), by 15 U.S.C. § 1681s.

 The Fair Credit Reporting Act is a federal enactment dealing with a subject that has been largely a matter of state law, largely concerned with claims for defamation. Traditionally, matters of this kind have arisen in cases where a credit report contains information that is inaccurate and unfavorable. The widely recognized rule is that so long as the communication is made bona fide on a matter in which the reporting person has an interest or duty, and is made only to another who has a corresponding interest or duty, the communication is "privileged", even though incorrect and defamatory, and cannot be sued on.

 At common law, proof of malice in the making of a defamatory communication was an essential element of the claim, but malice was inferred in law if it were shown that the communication were false and defamatory.

 However, in cases where "privilege" of this kind was shown no such inference in law arose, and it was necessary for the plaintiff, as part of his case, to prove "actual malice" or face dismissal or directed verdict.

 Without exploring the subject in great detail, see decisions such as Rothholz v. Dunkle, 53 N.J.L. 438, at 440, 22 A. 193 (E. & A., 1891); King v. Patterson, 49 N.J.L. 417, 9 A. 705 (E. & A., 1887); Finkelstein v. Geismar, 91 N.J.L. 46, 106 A. 209 (Sup.1917), aff'd, 92 N.J.L. 251, 106 A. 210 (E. & A., 1918), which discuss the major English cases and leading cases from other jurisdictions.

 A more recent ruling is Jorgensen v. Pennsylvania R. Co., 25 N.J. 541, at 562-569, 138 A.2d 24 (1958).

 While the cases use the word "privilege", it is not in the same sense the word is used in connection with evidence law; rather, it is a form of justification in the sense that it is a privilege to make the communication under the conditions stated. And the privilege is "qualified" by the conditions of the rule. In modern terms, it might be called a "qualified immunity" from liability.

 In some instances, of course, defamatory statements are absolutely privileged, see Toft v. Ketchum, 18 N.J. 280, 113 A.2d 671 (1955), affirmed on ...


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