Safeco Insurance Co. of America v. Burr (2006)
- Docket
- 06-84
- Decided
- 2006-01-01
Summary
Question: Is a company guilty of a "willful" violation of the Fair Credit Reporting Act if it shows "reckless disregard" for the law, even if the company has no actual knowledge that the conduct violates the Act? Conclusion: Yes. In a unanimous decision written by Justice David Souter, the Court ruled that insurance companies can be liable for willful violations of the Fair Credit Reporting Act if they show "reckless disregard" for the law. The justices held that the meaning of the term "willful" is contextually determined. Under the common law reckless violations are considered willful violations, and the term is given its common meaning unless Congress intended to change it. The Court called the evidence of such an intent "shaky," and it pointed to another section of the statute which indicated that Congress was treating "knowing" and "reckless" violations as subcategories of "willful" violations. Though GEICO and Safeco lost on the issue of the meaning of "willful," the Court held that neither company had acted with reckless disregard. GEICO's policy - giving adverse action notices to new applicants only where they were likely to make a difference - was a correct interpretation of the statute. Though Safeco was in violation, its error was neither reckless nor willful.