                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 03-3307
                                   ___________

Charles Davenport; Brent Johnson,      *
individually and on behalf of all      *
others similarly situated,             *
                                       *
                     Appellants,       *
                                       * Appeal from the United States
       v.                              * District Court for the
                                       * District of Minnesota.
Farmers Insurance Group;               *
Illinois Farmers Insurance Company; *
Paul Peterson; Does 1 through 50,      *
                                       *
                                       *
                     Appellees.        *
                                  ___________

                             Submitted: May 12, 2004
                                Filed: July 28, 2004
                                 ___________

Before WOLLMAN, HEANEY, and MURPHY, Circuit Judges.
                         ___________

HEANEY, Circuit Judge.

       Plaintiffs Charles Davenport and Brent Johnson brought this suit on behalf of
themselves and others similarly situated, alleging that Defendants Farmers Insurance
Group, Illinois Farmers Insurance Company, Paul Peterson, and Does 1 through 50
(collectively referred to as Farmers) violated the Minnesota Insurance Fair
Information Reporting Act (MIFIRA) by collecting and disclosing their personal
information without first providing them notice and securing their written
authorization. Farmers moved to dismiss for failure to state a claim, arguing that the
federal Fair Credit Reporting Act (FCRA) preempted the MIFIRA. Although the
district court found that the FCRA did not preempt the MIFIRA, it nonetheless
granted Farmers’ motion, concluding that the MIFIRA did not require Farmers to
notify the plaintiffs or obtain their written authorization before gathering their
personal information. We affirm in part and reverse in part.

                                 BACKGROUND

        Since the district court decided this matter based on a motion to dismiss, we
recite the facts as alleged in the complaint, viewing them in the light most favorable
to the plaintiffs. Schaller Tel. Co. v. Golden Sky Sys., Inc., 298 F.3d 736, 740 (8th
Cir. 2002). Charles Davenport and Brent Johnson1 are both Minnesota residents who
have purchased property and automobile insurance policies from Farmers for over ten
years. Farmers sells insurance, and is licensed to do business in Minnesota. Within
the last five years, Farmers obtained the plaintiffs’ personal information, including
credit reports, for purposes unrelated to any claims made by them. Farmers did not
provide Davenport or Johnson any notice of its intent to procure this information, nor
did it receive written authorization from Davenport or Johnson to do so.

      On February 3, 2003, Davenport and Johnson filed suit on behalf of themselves
and others similarly situated, alleging violations of Minnesota law. Specifically, they
argued that Farmers violated the MIFIRA by collecting and disclosing personal
information about policyholders and potential policyholders without first notifying
them or receiving written authorization to procure such information. Farmers moved


      1
      Davenport and Johnson purport to represent a class of those similarly situated.
Reference to the two named plaintiffs applies equally to the putative class unless
otherwise noted.

                                         -2-
to dismiss for failure to state a claim, arguing that federal law preempted the MIFIRA
because the FCRA allows the collection and disclosure of such information without
any notice to or authorization from consumers. The district court determined that the
MIFIRA was not preempted by the FCRA, but that the MIFIRA did not provide the
plaintiffs any relief because it allowed disclosure of personal information without
written authorization where such disclosure was permitted by another law, such as the
FCRA. Accordingly, the district court granted Farmers’ motion, and this appeal
followed.

                                     ANALYSIS

       We review the district court’s order dismissing a complaint for failure to state
a claim de novo, granting no deference to its interpretation of either federal or state
law. Raz v. United States, 343 F.3d 945, 947 (8th Cir. 2003) (per curiam) (citations
omitted). “When considering a motion to dismiss, we take the complaint’s material
allegations as true and liberally construe the complaint in the plaintiff’s favor.” Rucci
v. City of Pacific, 327 F.3d 651, 652 (8th Cir. 2003).

       Minnesota, through the MIFIRA, regulates the collection and disclosure of
consumers’ personal information by insurance companies doing business in the state.
See generally Minn. Stat. §§ 72A.49-.505. The federal government, through the
FCRA, also governs the collection, retention, and use of consumer information,
including credit reports. See generally 15 U.S.C. §§ 1681-1681x. Where state law
is inconsistent with the FCRA “with respect to the collection, distribution, or use of
any information on consumers,” the FCRA preempts state law, but “only to the extent
of the inconsistency.” 15 U.S.C. § 1681t(a).




                                          -3-
        The plaintiffs first contend that Farmers violated the MIFIRA by failing to
notify them before obtaining their personal information, including credit reports.2
According to the MIFIRA, insurance companies doing business in Minnesota must
notify applicants and policyholders if the company intends to obtain their personal
information, and must state its purpose in collecting such information. Minn. Stat.
§ 72A.494, subds. 1, 4. The FCRA also regulates the use of personal information
such as credit reports, by those who use the reports, such as insurance companies.
See, e.g., 15 U.S.C. § 1681m (detailing the duties and obligations of users of
consumer reports). The FCRA does not, however, specifically require insurance
companies to notify consumers before obtaining their personal information, nor does
it affirmatively permit the procurement of such information without first providing
notice to consumers. Farmers would have us hold that the MIFIRA is inconsistent
with the FCRA simply because the MIFIRA regulated a matter not addressed by the
FCRA. We decline to interpret Congress’s silence with regard to any notice
requirement to signify its intent to prohibit states from enacting their own regulations
on the issue.

       Federal law may preempt state law in three instances: 1) where Congress
expressly indicates that the law is meant to preempt state law; 2) where federal law
and state law conflict; and 3) where federal law occupies the entire legislative domain
of an issue. Bank of Am. Nat’l Trust & Sav. Ass’n v. Shirley, 96 F.3d 1108, 1112
(8th Cir. 1996). “When Congress has spoken expressly, however, the preemptive


      2
        At oral argument, Farmers suggested that the plaintiffs’ so-called “notice”
claim was not properly raised by the plaintiffs in their complaint. Paragraph 3 of the
complaint, however, alleges that Farmers “unlawfully obtain[ed] . . . the private
financial, credit, and other confidential and personal information of its policy holders
and applicants . . . without notice to plaintiffs.” (J.A. at 2 (emphasis added)).
Particularly in light of our directive to “liberally construe the complaint in the
plaintiff’s favor,” Rucci, 327 F.3d at 652, we find Farmers’s contention to be without
merit.

                                          -4-
scope of the federal law is governed entirely by the express language.” Id. (quoting
Weber v. Heaney, 995 F.2d 872, 875 (8th Cir. 1993)). The FCRA makes clear that
it is not intended to occupy the entire regulatory field with regard to consumer
reports. See 15 U.S.C. § 1681t(a) (stating the FCRA “does not annul, alter, affect, or
exempt any person subject to the provisions of this subchapter from complying with
the laws of any State with respect to the collection, distribution, or use of any
information on consumers, except to the extent that those laws are inconsistent with
any provision of [the FCRA]”); Credit Data of Ariz., Inc., v. Arizona, 602 F.2d 195,
197 (9th Cir. 1979); Lin v. Universal Card Servs. Corp., 238 F. Supp.2d 1147, 1152
(N.D. Cal. 2002); Hughes v. Fidelity Bank, 709 F. Supp. 639, 640-41 (E.D. Pa. 1989).
On the contrary, the statute plainly limits its preemption of state regulations “only to
the extent of the inconsistency” with those regulations. 15 U.S.C. § 1681t(a).
Moreover, the Federal Trade Commission (FTC) issued commentary on the FCRA
in order to clarify any doubt regarding its meaning. 16 C.F.R. § 600.1(b). This
commentary reiterates that the FCRA was not intended to usurp the entire field of
consumer report law: “State law is pre-empted by the FCRA only when compliance
with inconsistent State law would result in violation of the FCRA.” 16 C.F.R. Pt.
600, App. § 622. In fact, the FTC included an example of a permissible state
regulation which bears close resemblance to the facts before us: “A State law
requirement that an employer provide notice to a consumer before ordering a
consumer report . . . would not be pre-empted, because a party that complies with
such provisions would not violate the FCRA.” Id. We find this commentary
particularly analogous since employers and insurance companies are treated similarly
with respect to the acquisition of consumer reports under the FCRA. Compare 15
U.S.C. § 1681b(a)(3)(B) (permitting a consumer reporting agency to release a
consumer report for employment purposes) with 15 U.S.C. § 1681(a)(3)(C)
(permitting same for purpose of underwriting insurance for the consumer).

      As the district court correctly noted, the FCRA allows consumer reporting
agencies to furnish consumer reports to insurance companies for the purpose of

                                          -5-
underwriting insurance involving that consumer without first getting the consumer’s
permission. 15 U.S.C. § 1681b(a)(3)(C). The plaintiffs have never maintained,
however, that Farmers is a consumer reporting agency. Indeed, Farmers agrees that
“[i]n the context of the allegations in Plaintiffs’ Complaint, Farmers is considered a
user of consumer reports.” (Appellee’s Br. at 5.) The fact that the FCRA does not
require consumer reporting agencies to notify insurance consumers that their reports
may be examined is irrelevant to the issue of whether states may require insurance
companies, as users of the reports, to provide notice before obtaining those reports.
Farmers directs us to the FTC commentary stating that an insurance company may
“obtain a consumer report to decide whether or not to issue a policy to the consumer,
the amount and terms of coverage, the duration of the policy, the rates or fees
charged, or whether or not to renew or cancel a policy.” 16 C.F.R. Pt. 600, App.
§ 604(3)(C). Farmers suggests that this lends support to its argument that the FCRA
relieves them of any obligation to provide notice to consumers prior to procuring their
consumer reports. We disagree. This section of the commentary merely reaffirms
that the FCRA allows insurance companies to obtain the reports for the purpose of
insurance underwriting; it does not speak at all to the issue of notice. The MIFIRA’s
requirement that insurance companies notify consumers before collecting their
personal information does not conflict with the FCRA and is consistent with relevant
FTC commentary regarding supplemental state laws. We therefore find that the
MIFIRA’s notice provisions are not preempted by the FCRA.

       The district court agreed that the plaintiffs’ notice claim was not preempted by
federal law. Rather, it turned to a subdivision of the MIFIRA stating that “[p]ersonal
or privileged information may be disclosed without a written authorization if
permitted or required by another law.” Minn. Stat. § 72A.502, subd. 6. Reasoning
that the FCRA clearly permitted disclosure of such information, see 15 U.S.C.
§ 1681b(a)(3)(C), it found the MIFIRA inapplicable.




                                         -6-
       We find the district court erred in dismissing the plaintiffs’ claims in their
entirety based solely on subdivision 6 of Minnesota Statute section 72A.502. First,
subdivision 6, by its own terms, only applies to claims alleging the improper
disclosure of personal information. Minn. Stat. § 72A.502, subd. 6. Moreover,
subdivision 6 is a limitation of liability for acts that would otherwise constitute
violations of Minnesota Statute section 72A.502. An allegation that an insurer failed
to provide consumers notice before collecting personal information is distinct from
a claim that the insurer improperly disclosed that information. Each is governed by
separate sections of the MIFIRA. Compare Minn. Stat. § 72A.502 (regulating the
practice of insurance companies disclosing personal information) with Minn. Stat.
§ 72A.494 (requiring insurance companies to notify consumers prior to collecting
such information). Thus, while subdivision 6 of section 72A.502 allows Farmers to
disclose consumers’ personal information when another law permits such disclosure,
it does not absolve Farmers of responsibility for failing to provide notice pursuant to
section 72A.494 before collecting that information.

       We next address the plaintiffs’ claims that Farmers violated the MIFIRA by
collecting and disclosing their personal information without first obtaining their
written authorization. According to the MIFIRA,

      An insurer, insurance agent, or insurance-support organization must not
      disclose any personal or privileged information about a person collected
      or received in connection with an insurance transaction without the
      written authorization of that person except as authorized by this section.
      An insurer, insurance agent, or insurance-support organization must not
      collect personal information about a policyholder or an applicant not
      relating to a claim from sources other than public records without a
      written authorization from the person.

Minn. Stat. § 72A.502, subd. 1.




                                         -7-
       To the extent that the plaintiffs maintain that Farmers violated the MIFIRA not
getting their written permission before disclosing their personal information, the
claim merits little discussion. As noted above, the MIFIRA allows personal
information to be “disclosed without a written authorization if permitted or required
by another law.” Minn. Stat. § 72A.502, subd. 6. As contemplated by the MIFIRA,
disclosure of such reports is permitted by another law–the FCRA. This is so because
when Farmers is disclosing the plaintiffs’ personal information, it is no longer a user
of the reports, but is furnishing the reports to others. Under limited circumstances,
the FCRA permits furnishers of consumer reports to release them to third parties
without obtaining consumers’ written authorization. 15 U.S.C. § 1681b. Since the
disclosure of the plaintiffs’ personal information is “permitted . . . by another law,”
Minn. Stat. § 72A.502, subd. 6, Farmers was not required to obtain the plaintiffs’
written permission before furnishing the information to others. We affirm the
portion of the district court’s order finding the plaintiffs failed to state a claim under
the MIFIRA for the unauthorized disclosure of their personal information.

       While subdivision 6 of Minnesota Statute section 72A.502 yields to the FCRA
with regard to the disclosure of personal information, it does not address the
collection of that information. The MIFIRA speaks in mandatory language: insurers
“must not collect personal information about a policyholder or an applicant not
relating to a claim from sources other than public records without a written
authorization from the person.” Minn. Stat. § 72A.502, subd. 1. As with the
plaintiffs’ claim that Farmers did not adequately notify them before obtaining their
personal information, the FCRA is silent as to the issue of whether Farmers is
permitted to collect such information without first obtaining written permission.
Here, too, we decline to read Congress’s silence as evidence it intended to preempt
a state law which does not directly conflict with the FCRA. Accord 15 U.S.C.
§ 1681t(a). With no statement from either the FCRA or the MIFIRA exempting
Farmers from liability, we find the district court erred in holding that the plaintiffs did



                                           -8-
not state a claim under the MIFIRA for Farmers’ failure to obtain written
authorization before collecting their personal information.3

                                   CONCLUSION

       The plaintiffs appeal the district court’s order dismissing their suit for failure
to state a claim under the MIFIRA. We agree with the district court that the MIFIRA
is not preempted by the FCRA. We further find, however, that the plaintiffs have
sufficiently alleged that Farmers violated the MIFIRA by obtaining and collecting
their personal information without first notifying them or procuring their written
authorization to do so. We reverse the district court’s judgment to the contrary, and
remand for proceedings consistent with this opinion.
                        ______________________________


      3
       Since the filing of this suit, the MIFIRA has been amended to state that no
written authorization is required for

      the collection and use of a numeric product referred to as an insurance
      score or credit score that is used by a licensed insurance agent
      exclusively for the purpose of underwriting or rating an insurance
      policy, if the agent informs the policyholder or prospective policyholder
      requesting the insurance coverage that an insurance score or credit score
      will be obtained for the purpose of underwriting or rating the policy.

Minn. Stat. § 72A.501, subd. 2(c). Farmers contends that this amendment simply
clarifies that its conduct was always permitted under the MIFIRA, but has provided
no authority for this proposition. Moreover, the plaintiffs have alleged Farmers
unlawfully obtained their personal information, a universe of data larger than the
“numeric product referred to as an insurance score or credit score” referred above.
See Minn. Stat. § 72A.491, subd. 17 (defining personal information to broadly
include any information “from which judgments can be made about an individual’s
character, habits, avocations, finances, occupation, general reputation, credit, health,
or any other personal characteristics”).

                                          -9-
