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Union Planters Bank, N.A. v. Gavel

United States District Court, E.D. Louisiana
Mar 11, 2003
Civil Action No. 02-1224, Section "T"(4) (E.D. La. Mar. 11, 2003)

Summary

In Union Planters Bank, N.A. v. Gavel, Civil Action No. 02-1224 (E.D.La., March 11, 2003), vacated on other grounds, Union Planters National Bank Ass’n v. Salih, 369 F.3d 457 (5th Cir. 2004), a financial institution sought a permanent injunction to enjoin a former employee from complying with a subpoena by disclosing the nonpublic personal financial information of its customers.

Summary of this case from Connex Credit Union, Inc. v. Barberino Brothers, Inc.

Opinion

Civil Action No. 02-1224, Section "T"(4).

March 11, 2003


Before the Court is a Motion for Permanent Injunction [Doc. 25], filed on behalf of Union Planters Bank, N.A. The Court, having considered the arguments of counsel, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.

ORDER AND REASONS

I. BACKGROUND:

Union Planters Bank, N.A. ("Union Planters") seeks to prevent the release of private consumer financial information without the consent of the relevant consumers in accordance with the Gramm-Leach-Bliley Act ("GLBA"), 15 U.S.C. § 6801, et seq. In the state court proceeding, Salih v. Union Planters Bank, 2001-118, Civil District Court for the Parish of Orleans, State of Louisiana, a subpoena was issued to John A. Gavel, Jr. for the production of certain information relating to customers of Union Planters.

Specifically, the subpoena originally requested (1) "any and all records" wherein Union Planters requested the placement or purchase of flood insurance and the amounts of any such insurance policies; (2) the names, addresses, and telephone numbers of any party currently or formerly indebted to Union Planters by virtue of a residential mortgage/deed of trust loan, the current balance of said loan, the original loan amount, the loan balance on the effective date of any flood insurance policy where flood insurance was provided by Union Planters; and, (3) any records showing the mortgage balance and the original amount of the loan where flood insurance was placed by Union Planters.

John A. Gavel, Jr. and his employer, WNC Insurance Services, Inc. ("WNC"), filed a Motion to Quash/Motion for Protective Order with regard to the subpoena in the state court to the extent it sought information barred from disclosure by Louisiana privacy laws and the GLBA. The motion was denied; however, the state court limited the subpoena as follows:

All records regarding forced placement of insurance in the State of Louisiana from Union Planters Bank, by and through John A. Gavel, Jr., a Louisiana broker, as requested by WNC from January 1, 1991, through December 31, 2001.

WNC and Gavel then applied for writs with the Fourth Circuit Court of Appeals, State of Louisiana. Writs were denied as it related to Gavel, however, granted with respect to WNC, as it was found that WNC as a non-party, non-resident corporation could not be subpoenaed to produce documents at a deposition in Louisiana. As such, Gavel was prepared to produce the information sought in the subpoena, as modified by the state court, at his deposition on April 24, 2002.

Union Planters filed this action seeking a temporary restraining order seeking to enjoin Gavel from disclosing the information requested by the Salih plaintiffs subpoena, as modified, as it violated the GLBA. This Court entered the temporary restraining order until it could rule on the injunction. Subsequently, the intervenors went back to state court to seek a clarification of the state court's ruling.

On May 9, 2002, this Court entered an order [Doc. 11] granting the imposition of a preliminary injunction, and dismissing a motion to dismiss by intervenor Tariq Salih, individually and as administrator of the Succession of Canty. This order enjoined all parties from taking any action in the state courts which would render this Court's order ineffective or jeopardize the parties who were directed to comply with the order. Tariq Salih subsequently moved for reconsideration of this Court's order of May 9, 2002; the request for reconsideration was denied. Plaintiffs now move the Court to issue a permanent injunction.

II. ARGUMENTS OF THE RESPECTIVE PARTIES:

A. Arguments of Union Planters in Support of a Preliminary Injunction:

Union Planters contends that it will succeed on the merits of its claim. The GLBA clearly prohibits the disclosure of non-public information to third parties unless the consumer is given the opportunity, before the time that the information is disclosed, to direct that the information not be disclosed to said third party. See, 15 U.S.C. § 6802 (b)(1). Unless Gavel is enjoined from producing the information requested, non-public personal information covered by the GLBA will be disclosed to third parties without any individual customer's advance knowledge or consent, in clear violation of the statute. Once disclosed, there is no monetary relief which could possible provide compensation to injured victims.

Secondly, it is submitted that, as this Court found in the May 9, 2002 order granting preliminary injunction, Union Planters faces irreparable injury. The disclosure of this information by Gavel would result in an invasion of privacy of Union Planters' customers. Union Planters will surely suffer injury to its business reputation when its customers learn that their private financial information was divulged to third parties without their consent.

Next, Union Planters argues that privacy and commercial interests favor issuance of a permanent injunction. Union Planters can be issued regulatory sanctions in the event that disclosure of nonpublic personal information is made known in violation of the GLBA. Moreover, Union Planters will face the wrath of at least some of its customers. While an injunction would protect Union Planters and the rights of its customers, it would not impinge upon Mr. Gavel or, to the extent relevant, the Salih plaintiffs attorneys. Gavel has no particular interest in disclosing the information sought in the subpoena, which he possesses solely in his capacity as agent for Union Planters. As for the plaintiffs attorneys, there is no reason this information would be required other than for client development.

Finally, Union Planters asserts that the injunctive relief will not undermine or disserve the public interest, and will serve the public interest in vindicating congressionally mandated privacy interests. A federal statute designed to protect the privacy interests of American consumers could only serve to promote the public interest in this case. There is no countervailing public interest in allowing Gavel to violate the statute.

B. Arguments of the Intervenors in Support of a Dismissal or Stay of the Action:

Intervenors contend that from the outset of the case, this Court has lacked the requisite subject matter jurisdiction to entertain Plaintiffs action, and that the Plaintiffs complaint fails to state a claim for which relief can be granted. On the jurisdictional argument, the Intervenor claims that due to the fact that the injunction action is premised on the GLBA, this Plaintiff has no right of action nor any standing to bring this claim since the GLBA does not grant a private litigant the right to bring an action such as this to enforce the GLBA. They continue by stating that 15 U.S.C. § 6501 codified legislative intent to allow the GLBA to be enforced by regulatory agencies, not private litigants, in order to ensure compliance with the Act. They maintain that the GLBA lacks the requisite statutory intent to provide for a private right of action. On the standing argument, the Intervenors claim that the Plaintiff has no legal stake in the outcome of the injunction action since the Plaintiff legally released the nonpublic personal information to WNC Insurance Services, Inc. (WNC); this was done in compliance with the GLBA, and there are no allegations that WNC improperly transmitted the information to its agent, Mr. Gavel. Intervenors maintain that since the Plaintiff is legally insulated from any potential liability due to its legal actions under the GLBA, then it has no legal stake and no standing to bring the injunction action. Intervenor also states that the kind of disclosure that is to take place in the state court action, disclosure under a properly authorized subpoena, is proper under 16 C.F.R. § 313.11, which was promulgated following the establishment of the GLBA.

Intervenors contend that the matter before the Court was "res judicata" pursuant to the ruling of the Fourth Circuit Court of Appeals, and denial of writs by the Louisiana Supreme Court, or in the alternative, that this Court should abstain. It is submitted that after considering the "Colorado River" doctrine of abstention factors, as set forth in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), namely, that (1) this forum would be inconvenient, as it has already been twice removed and remanded; (2) abstention in this case would avoid piecemeal litigation; and, (3) the state court proceeding was the first filed action. Additionally, it is submitted that after this matter has been removed and remanded twice, Union Planters now attempts to gain federal jurisdiction by suing its own insurance agent. Both the res judicata argument and the abstention argument have been put before the Court on different occasions previously. Finally, the Intervenors challenge that the injunction violates the Anti-Injunction Act, 28 U.S.C. § 2283.

III. LAW AND ANALYSIS:

A. Law on Res Judicata:

Under federal law, res judicata bars a subsequent action when a prior judgment has been rendered in an action where: (1) the parties are the same in both suits, (2) the prior judgment was rendered by a court of competent jurisdiction, (3) there has been a final judgment on the merits, and (4) the same cause of action is involved in both cases. See, Nilsen v. City of Moss Point, Miss., 701 F.2d 556 (5th Cir. 1983); Agrilectric Power Partners v. General Elec. Co., 20 F.3d 663 (5th Cir. 1994). The principal test for comparing causes of action is whether the primary right and duty or wrong are the same in each action. Nilsen, supra. Furthermore, in determining whether the same cause of action is involved, the critical issue is not what relief is requested or the theory asserted, but rather whether plaintiff bases two actions on the same nucleus of operative facts. Res judicata bars all claims that were or could have been advanced in support of a cause of action on occasion of its former adjudication, not merely those that were adjudicated. Travelers Insurance Co. v. St. Jude Hospital of Kenner, 37 F.3d 193 (5th Cir. 1994), rehearing denied, 41 F.3d 666 (5th Cir. 1994), cert. denied, 514 U.S. 1065, 115 S.Ct. 1696, 131 L.Ed.2d 559 (1995). A final judgment is res judicata even if it is still appealable. Amcast Industrial Corp. v. Detrex Corp., 45 F.3d 155 (7th Cir. 1995).

B. Law on Abstention Doctrine:

A federal court may decline to exercise jurisdiction if there is a pending action in state court involving the same parties and there are exceptional circumstances involving wise judicial administration and conservation of judicial resources. Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). However, the United States Supreme Court stated that abstention is "an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it" and that federal courts have a "virtually unflagging obligation . . . to exercise the jurisdiction given to them." Colorado River, 424 U.S. at 813, 817, 96 S.Ct. at 1244, 1246; Falcon Operators v. P.M.P. Wireline Services, Inc., 1997 WL 313417 (E.D.La. 6/9/97). A party requesting a district court to abstain must demonstrate "exceptional circumstances and the clearest of justifications" to justify the surrender of a federal court's jurisdiction. Colorado River, 424 U.S. at 824, 96 S.Ct. at 1250.

The United States Supreme Court articulated the following factors a district court should consider when deciding whether or not to decline jurisdiction:

1. Whether the federal court has assumed jurisdiction over the res;

2. Inconvenience of the federal forum;

3. Desirability of avoiding piecemeal litigation;

4. The order in which jurisdiction was obtained;

5. Whether federal law provides the basis of decision; and,
6. Whether state court proceedings are inadequate to protect federal court's plaintiffs rights.
Colorado River, 424 U.S. at 818, 96 S.Ct. at 1246-47; Moses H. Cone, 460 U.S. at 16, 103 S.Ct. at 937. No one factor is determinative; a carefully considered judgment taking into account both the obligation to exercise jurisdiction and the combination of factors counselling against that exercise is required. Id.

However, there must first exist truly parallel cases. The Fifth Circuit defines parallel actions as those involving the same parties and the same issues. Republic Bank Dallas National Association v. McIntosh, 828 F.2d 1120 (5th Cir. 1987) per curiam; PPG Industries, Inc. v. Continental Oil Co., 478 F.2d 674, 682 (5th Cir. 1973); Hartford Acc. Indem. v. Costa Lines Cargo Serv., 903 F.2d 352 (5th Cir. 1990); Doerle's Quarterboats, Inc. v. Been Weeks, Co., 1995 WL 747470 (E.D.La.).

See also, Nakash v. Marciano, 882 F.2d 1411 (9th Cir. 1989) (citing Republicbank); Crawley v. Hamilton County Comm'rs., 744 F.2d 28 (6th Cir. 1984).

Under the abstention doctrine as articulated in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and the sextet of cases decided along side, also called the "Our Federalism" line of cases, the Supreme Court held that "a federal court should not enjoin a state criminal prosecution begun prior to the institution of the federal suit except in very unusual situations, where necessary to prevent immediate irreparable injury." Samuels v. Mackell, 401 U.S. 37, 69, 91 S.Ct. 746, 766, 27 L.Ed.2d 669 (1971). Later court decisions have expanded this doctrine to civil and administrative procedures. Louisiana Deb. And Lit. Ass'n v. City of New Orleans, 42 F.3d 1483, 1489 (5th Cir. 1995); See Word of Faith World Outreach Center Church, Inc. v. Morales, 986 F.2d 962 (5th Cir.), cert. denied, 510 U.S. 823, 114 S.Ct. 82, 126 L.Ed.2d 50 (1993). Three questions must be demanded of the matter at hand: (1) whether the state proceedings "constitute an ongoing state judicial proceeding;" (2) whether the proceedings "implicate important state interests;" and (3) whether there is an "adequate opportunity in the state proceedings to raise constitutional challenges." Louisiana Deb. And Lit. Ass'n, 42 F.3d at 1490, ( quoting County Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 432, 102 S.Ct. 2515, 2521, 73 L.Ed.2d 116 (1982)).

C. Law on Anti-Injunction Act:

The Anti-Injunction Act prohibits a federal court from granting an injunction to stay proceedings in a state court "except as expressly authorized by an Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. § 2283; Next Level Communications LP v. DSC Communications Corp., 179 F.3d 244, 249 (5th Cir. 1999). These exceptions are narrowly construed. See Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 146, 108 S.Ct. 1684, 100 L.Ed.2d 127 (1988); Atlantic Coast Line, 398 U.S. at 287, 90 S.Ct. 1739.

D. Law on Permanent Injunction:

The standard for obtaining a permanent injunction is "essentially the same" as for obtaining a preliminary injunction. Lionheart v. Foster, 100 F. Supp.2d 383, 385 (E.D. La. 1999); Medx, Inc. v. Ranger, 788 F. Supp. 288, 289 (E.D. La. 1992). This court ordered a preliminary injunction on May 9, 2002. In order to secure a preliminary injunction, the movant has the burden of proving four elements: (1) a substantial likelihood of success on the merits; (2) a substantial threat that the movant will suffer irreparable injury if the injunction is not issued; (3) that threatened injury to the movant outweighs any damage the injunction might cause to the opponent; and (4) that the injunction will not disserve the public interest. See Apple Barrel Productions, Inc. v. R.D. Beard, 730 F.2d 384, 386 (5th Cir. 1984) (citing Dallas Cowboy Cheerleaders v. Scoreboard Posters, Inc., 600 F.2d 1184, 1187 (5th Cir. 1979)). In order to obtain preliminary injunctive relief, the Plaintiff must successfully carry the burden of persuasion as to each element of the four-pronged test. See id. at 389. That is, a preliminary injunction will be denied based on a failure to prove separately each of the four elements of the four-prong test for obtaining the injunction., Apple Barrel Productions, 730 F.2d at 389; Southern Monorail Co. v. Robbins Myers, Inc., 666 F.2d 185, 186 (5th Cir. 1982). The only difference in establishing a motion for permanent injunction is that the movant seeking a permanent injunction must demonstrate actual success on the merits, rather than a substantial likelihood of success. Calmes v. United States, 926 F. Supp. 582, 591-92 (N.D. Tex. 1996) ( citing Amoco Production Co., v. Village of Gambell, Alaska, 480 U.S. 531, 546 n. 12, 107 S.Ct. 1396, 1404 n. 12, 94 L.Ed.2d 542 (1987)). The Fifth Circuit has held that "[i]njunctive relief is an extraordinary and drastic remedy, not to be granted routinely, but only when the movant, by a clear showing, carries the burden of persuasion." Lionheart, 100 F. Supp.2d at 386 ( citing Holland America Ins. Co. v. Succession of Roy, 777 F.2d 992, 997 (5th Cir. 1985)).

E. The Court's Analysis:

The Intervenors contend that this Court should dismiss the complaint of Union Planters as the matter is res judicata, or in the alternative, that this Court should abstain from deciding this matter. It remains the opinion of this Court, however, that neither res judicata, nor abstention bars the injunctive relief sought by Union Planters under the circumstances presented herein. For this matter, the Court maintains that its finding in granting the preliminary injunction was correct. Res Judicata bars a subsequent action only when a prior judgment has been rendered in an action where the parties are the same in both suits. Nilsen, supra. In the preliminary injunction order, this Court wrote:

In this instance, while Union Planters was a party to the state court proceeding, it was not the party to which the subpoena was directed. As such, Union Planters had no real standing to request that said subpoena be quashed. Rather, it was Gavel and WNC who sought to have the subpoena quashed. This Court notes that while Union Planters was present at the hearing in state court, and further, filed a brief with the appellate court, it is the opinion of this Court that Union Planters, at no time, had a full and fair opportunity to have its position considered as it was not a direct party-in-interest to those proceedings involving the subpoena issued to Gavel. It was not until Gavel was ordered to disclose the information requested in the subpoena that Union Planters had a justiciable issue. As such, the ruling by the state court in no way bars the present litigation on res judicata grounds.
Order and Reasons, May 9, 2002, Doc. 11, p. 8. The Court has previously denied the request by the Intervenors and finds no persuasive argument whereby it should vacate is previous reasoning.

Next, this Court must consider whether abstention is appropriate in the present case. While in their first motion to stay or dismiss, Intervenors challenged this Court's power to entertain the motion on the abstention doctrine as articulated under Colorado River. Now, the Intervenors wish to switch facts and try another way through the Younger abstention doctrine. A court may abstain only in the rarest of circumstances. See, Colorado River, supra. The most recent pronouncement from the Fifth Circuit makes clear that a federal district court may not abstain from deciding a case brought properly in federal court under federal law solely because that party is involved in a related state-court action. Bank One, N.A. v. Boyd, 2002 WL 518633 (5th Cir. Apr. 5, 2002).

Considering the factors for determining whether abstention is appropriate, this Court finds that on balance, the factors weigh in favor of exercising jurisdiction. This Court has already addressed the application of the Colorado River 9 doctrine, and declined to abstain under that scenario. See Order and Reasons, May 9, 2002, Doc. 11. This Court wrote:

While this Court is confident in the abilities of the state court to consider, interpret, and apply the federal law, the relief sought by Union Planters could not have been awarded by the state court, as it was not the party to which the subpoena was issued. As such, it is the opinion of this Court, that Union Planters has invoked this Court's jurisdiction pursuant to a federal statute and has a right to have this Court decide the issue before it. See, Id. (citing Donovan v. City of Dallas, 377 U.S. 408, 84 S.Ct. 1579, 12 L.Ed.2d 409 (1964)). There is nothing vexatious in Union Planters' resort to the federal courts and as such, abstention will not be granted.

Today, this Court declines to abstain under the application of the Younger abstention doctrine. While the state court proceedings may implicate and activate one of the Younger tenets, the Court cannot forget its previous reasoning that "it is the opinion of this Court that Union Planters, at no time, had a full and fair opportunity to have its position considered as it was not a direct party-in-interest . . ." Order and Reasons, May 9, 2002, Doc. 11. The same reasoning applies in the immediate motion that applied in the reasoning on May 9, 2002; the only thing that has changed is the title of the abstention document that the Intervenor is arguing. Notwithstanding, the result here is the same. The Court chooses to exercise jurisdiction in this matter.

Similarly, the Court is not persuaded by Intervenor's arguments regarding the application of the Anti-Injunction Act. Intervenor argues that "the Anti-Injunction Act is an absolute bar to any federal court action that has the effect of staying a pending state court proceeding unless the action falls within a designated exception . . ." Intervenor Brief in Opposition, Doc. 27, p. 19. However, as Plaintiffs point out, the Court's injunction has not had any effect on the parallel state court proceedings. Nothing about the injunction proceedings in federal court have hindered the flow of information except for specific nonpublic personal information. Depositions continue to be scheduled and documents continue to be produced during discovery methods. The Court finds that the only effect that the preliminary injunction has had is to ensure that personal identification information is not transferred in that process without the notice to or consent from the affected customers. Such an effect does not have the effect of "staying" the state court proceedings, and only acts to protect the privacy interests of the Plaintiffs customers.

Accordingly, this Court must now look to the merits of whether the permanent injunction should be issued. It is clear to this Court that federal law, the GLBA, specifically prohibits Mr. Gavel from disclosing the information sought by the subpoena issued, as modified by the state court, without the consent of the customers. 15 U.S.C. § 6802 (b)(1). Mr. Gavel received the information sought by the subpoena from WNC which provides insurance services to Union Planters. Gavel, in turn, performs services for WNC with respect to Union Planters' Louisiana customers by preparing and filing surplus lines tax statements and paying the associated tax to the Louisiana Department of Insurance. As such, Mr. Gavel is included in the prohibitions of the GLBA, as said provisions apply to "financial institutions", for which Union Planters is without a doubt; but which also include any person or organization significantly engaged in an activity which is "financial in nature". The activities of Mr. Gavel in providing insurance brokerage and administrative services for loans and acting as agent or broker for purposes of insuring against loss, are "financial in nature" GLBA's non-disclosure rules, therefore, apply to the risk of Gavel's disclosure of the information requested by the Intervenors [state-court plaintiffs], since those rules apply to activities that are "financial in nature." 12 U.S.C. § 1843 (k)(3)(B) and 12 C.F.R. § 225.28 (b)(1).

Moreover, the information which Gavel has been asked to produce is clearly "nonpublic personal information" which falls within the provisions of the GLBA prohibiting disclosure. Records regarding the forced placement of flood insurance for Union Planters' customers constitutes a "grouping" of non-public personally identifiable financial information which is precluded by the GLBA. See, 15 U.S.C. § 6809 (4)(A)(ii), © 12 C.F.R. § 40.3 (n). Furthermore, it is clear that the document sought by the Intervenors submitted to the Louisiana Department of Insurance, on its face, provides that the document is exempt from Louisiana's Public Records Law.

Finally, this Court finds that the "fraud" exception of the GLBA is not applicable in the current circumstances. See, 15 U.S.C. § 6802 (e)(3). To apply this exception, to the circumstances presented in this case, would render the protections provided by the GLBA meaningless. This Court is in agreement with Union Planters that said exception is intended for situations in which the customer is using the privacy associated with his financial account to perpetrate a fraud. Under those circumstances, a financial institution would be free to disclose the information about that customer and said account.

Accordingly, as discussed above, this Court finds that Union Planters has succeeded on the merits of its claim. Secondly, this Court believes that irreparable injury would result if Gavel were allowed to disclose the private financial information provided to him from Union Planters with respect to its customers, resulting in an invasion of privacy of Union Planters' customers, as well as injury to Union Planters' business reputation when its customers learn that their private financial information was divulged to third parties without their consent. Once this information has been provided, in contradiction to the dictates of the GLBA, there is no monetary relief which could compensate such a loss. Gavel would not be injured in any way should the injunction be entered, as he is merely the possessor of information with no real interest in the proceedings, and as he has admitted in his answer, but for an injunction by this Court, he would disclose without notice to Union Planters' customers those customers' personal information in response to an order of the Civil District Court for the Parish of Orleans. See Answer of John A. Gavel, Jr. ¶¶ 14, 16 ("Answer"). In the issuance of the preliminary injunction, this Court found that Union Planters could suffer grave consequences should the information sought in the subpoena be disclosed. Mr. Gavel has no interest in the disclosure of the information that would yield harm to him if he were to be enjoined from releasing the information. Since he has no personal stake in the outcome of the state court proceedings and no harm would come to him, the harm that would befall Union Planters significantly outweighs the harm that would come to Mr. Gavel if the nonpublic customer information were to be revealed. Additionally, Mr. Gavel did not object to the granting of the preliminary injunction, and he does not object to the granting of the immediate motion either. Finally, the injunction in no way would disserve the public interest as the injunction would merely uphold and enforce a federal statute. A federal statute designed to protect the privacy interests of American consumers could only serve to promote the public interest in this case. There is no countervailing public interest in allowing Gavel to violate this statue. While it may have been the legislative intent of Congress to avoid "hand[ing] a private action bonanza" to the plaintiff bar, as the Intervenor so aptly stated in his opposition brief, it was distinctly the legislative intent that:

See Defendant's Response to Plaintiffs Motion for Restraining Order and Preliminary Injunctive Relief and Intervenor's Motion to Dismiss or Stay, at 3, 5.

Defendant's Response to Plaintiff Motion for Entry of Permanent Injunction, at 1.

It is the policy of the Congress that each financial institution has an affirmative and continuing obligation to respect the privacy of its customers and to protect the security and confidentiality of those customers' nonpublic personal information. 15 U.S.C. § 6801 (a).

The GLBA is written with the protection of the customers of the financial institutions in mind. This protection continues in all aspects of the GLBA. Such protection can be seen when financial institutions are allowed to provide nonpublic personal information to nonaffiliated third parties, whereupon the nonaffiliated third party must maintain confidentiality. 15 U.S.C. § 6802 (b)(2). The subpoena issued in the state court proceeding seeks full disclosure of the very nonpublic consumer information which GLBA seeks to protect. Union Planters was the proprietor of the information, and in compliance with the GLBA, it disclosed the information to WNC, who, in turn, disclosed the information to its agent solely for business purposes. Since the subpoena seeks disclosure of information which otherwise would, by law, remain confidential, the action by Plaintiff to seek injunctive relief as to the specific nonpublic consumer information is correct. While Intervenor correctly states that a breach of the confidentiality agreement would engage WNC with federal regulators, the information that would be released pursuant to the subpoena would already have been released. The purpose of the injunction action is to stop the release of that information before it is made public. The Plaintiff has a definite right of action in that this injunction seeks to protect the Plaintiffs information. Although the state court subpoena was directed at Mr. Gavel and WNC, the Plaintiff would otherwise rely on the security agreement between the financial institutions and be secure that the nonpublic consumer information would remain nonpublic consumer information. The subpoena asks that this information be yanked out from the cloak of the protection not only of the security agreement, but also the GLBA. This Court has twice ruled that the Intervenor should be enjoined from gaining access to the nonpublic consumer information, and today, the Court maintains its previous reasoning.

Now, the movants have established that no trial or further proceedings are necessary for Union Planters to show its entitlement to a permanent injunction against disclosure of its customers' nonpublic personal information without notice to its customers. Accordingly, the request for permanent injunction is hereby GRANTED.

Accordingly,

IT IS ORDERED that the Motion for Permanent Injunction filed on behalf of the petitioner, Union Planters Bank, N.A., be and the same is hereby GRANTED. John A. Gavel, Jr. is enjoined only from disclosing documents, and/or information, as set forth in the modified subpoena, and subsequent Court clarification, which would violate the GLBA.

IT IS FURTHER ORDERED that Intervenors, Tariq Maurice Salih, Individually and as Administrator of the Succession of Canty, are hereby PERMANENTLY ENJOINED from taking any action in the state court which would render this Court's order ineffective or jeopardize the parties who were directed to comply with it.

See, D.G. Bland Lumber Co. v. National Labor Relations Board, 177 F.2d 555 (9th Cir. 1949); 28 U.S.C. § 2283.


Summaries of

Union Planters Bank, N.A. v. Gavel

United States District Court, E.D. Louisiana
Mar 11, 2003
Civil Action No. 02-1224, Section "T"(4) (E.D. La. Mar. 11, 2003)

In Union Planters Bank, N.A. v. Gavel, Civil Action No. 02-1224 (E.D.La., March 11, 2003), vacated on other grounds, Union Planters National Bank Ass’n v. Salih, 369 F.3d 457 (5th Cir. 2004), a financial institution sought a permanent injunction to enjoin a former employee from complying with a subpoena by disclosing the nonpublic personal financial information of its customers.

Summary of this case from Connex Credit Union, Inc. v. Barberino Brothers, Inc.

In Union Planters Bank, N.A. v. Gavel, Civil Action No. 02-1224 (E.D.La., March 11, 2003), vacated on other grounds, Union Planters National Bank Ass'n. v. Salih, 369 F.3d 457 (5th Cir. 2004), a financial institution sought a permanent injunction to enjoin a former employee from complying with a subpoena by disclosing the nonpublic personal financial information of its customers.

Summary of this case from McGuire v. Rawlings Co.
Case details for

Union Planters Bank, N.A. v. Gavel

Case Details

Full title:UNION PLANTERS BANK, N.A. v. JOHN A. GAVEL, JR

Court:United States District Court, E.D. Louisiana

Date published: Mar 11, 2003

Citations

Civil Action No. 02-1224, Section "T"(4) (E.D. La. Mar. 11, 2003)

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