Safeco Ins. Co. of America v. Burr, 551 U.S. 47 (2007)

In the case of Safeco Ins. Co. of America v. Burr, the underlying dispute arose from allegations that Safeco Insurance Company and GEICO General Insurance Company failed to provide required notices to consumers when adverse actions were taken based on information from their credit reports. Specifically, the Fair Credit Reporting Act (FCRA) mandates that consumers must be notified if they experience adverse actions, such as denial or changes in insurance coverage, based on their credit information. The plaintiffs argued that both insurance companies willfully violated this requirement, leading to potential civil liability under the FCRA. The procedural history of the case involved consolidated petitions from Safeco and GEICO, which were brought before the Supreme Court on writs of certiorari to the United States Court of Appeals for the Ninth Circuit. The central questions for the Court were whether a willful failure to provide notice includes actions taken with reckless disregard for the notice obligation and whether the actions of Safeco and GEICO constituted such recklessness. The Supreme Court ultimately ruled that reckless actions are indeed covered under the FCRA, but found that GEICO did not violate the statute, while Safeco might have but did not act recklessly. The relevant background context includes the enactment of the FCRA in 1970, aimed at ensuring fair and accurate credit reporting while protecting consumer privacy. The Act provides a private right of action for consumers against businesses that fail to comply with its provisions, allowing for actual damages in cases of negligence and statutory damages for willful violations. GEICO, which operates through multiple subsidiaries, had initially sent adverse action notices to applicants not offered preferred policies but changed its practice after developing a method to adjust credit scores in its evaluation process. This change in practice was central to the allegations of non-compliance with the FCRA.

Whether the Fair Credit Reporting Act's provision for civil liability for "willful failure" to provide notice of adverse action includes violations committed in reckless disregard of the notice obligation.

The judgment is affirmed.