The Supreme Court has extended federal authority over state public records, threatening the ability of state and local governments to make choices on how those records are made public.

This year, the Supreme Court changed the landscape of public records. It did so quietly, with little fanfare and little analysis, in a case that had attracted some press interest because of its implications for extending this courts interpretation of what the federal government can force the states to do. But the real bombshell was not the states rights argument, but rather the vast constitutional authority the court gave Congress to regulate the dissemination of public records.

In Reno v. Condon, the Supreme Court ruled on South Carolinas 10th Amendment challenge to the Drivers Privacy Protection Act. The 10th Amendment says that powers not explicitly given to the federal government are reserved to the states and have recently been interpreted as prohibiting various regulatory schemes that forced the states to act as surrogates for the federal government. Two states, South Carolina and Alabama, had convinced appellate courts that the DPPA violated the 10th Amendment because it forced the states to restrict access to their motor vehicle records and provided for criminal penalties if the states did not comply. Beyond what the statute did, many critics argued that Congress had no constitutional authority to regulate state records.

The surprise in the courts decision was the ease with which the court found that Congress indeed had that very authority under the Commerce Clause. Chief Justice William Rehnquist pointed out that "the motor vehicle information, which the states have historically sold, is used by insurers, manufacturers, direct marketers, and others engaged in interstate commerce to contact drivers with customized solicitations. The information is also used in the stream of interstate commerce by various public and private entities for matters related to interstate motoring. Because drivers information is, in this context, an article of commerce, its sale or release into the interstate stream of business is sufficient to support congressional regulation."

With that language, Rehnquist carved out a whole new area for congressional regulation. Until now, no one had seriously thought that public records that belonged to individual states, which reflected information collection or analysis solely by the states, could possibly be subject to federal regulation. But what the court said was that once that information crosses state lines, particularly as a commodity, it is subject to regulation by Congress.

Motor vehicle records in particular have become the bread and butter of about a dozen state networks run by the National Information Consortium in a public/private partnership. According to Brad Bradley, executive vice president for strategy and policy for the NIC, as well as its general counsel, the NIC makes a significant portion of its money from selling electronic access to insurance companies. States charge a per-record cost for motor vehicle records, typically $3. Instead of going down to the DMV to get the records, the state networks offer insurers the convenience of getting them electronically, which costs the insurer perhaps a dollar more per record. That extra dollar goes to the NIC. Since insurers can get the records because of an exception in the DPPA, the ability of the network to provide them to the insurers is not restricted by the law.

Because the networks do not play a role in setting information policy, the NIC is not directly affected by the Supreme Courts decision. However, there is an indirect effect. Part of the NICs job is to help states better market their records by establishing improved uses for them or finding new customers. Bradley indicates that part of what states have liked about the networks is that the NIC is in a much better position to analyze customer feedback to help states improve information dissemination by more accurately pinpointing