A federal appeals court recently issued a potentially troubling decision for corporations and their attorneys when it ruled that two insurance companies willfully failed to comply with a federal law protecting consumers from misuse of credit information despite reliance on advice by counsel that the original trial judge in the case said was legally correct.
In the case, Reynolds v. Hartford Financial Services, the San Francisco-based 9th Circuit held that the insurance companies intentionally violated the Fair Credit Reporting Act even though their lawyers told them the credit act did not require sending notices to their insureds and there was no caselaw or other precedent suggesting that the advice was wrong.
