On May 16, 2016, the Supreme Court of the United States issued its opinion in the closely watched case of Spokeo, Inc., v. Robins, No. 13-1339. Spokeo, Inc. is an online information aggregation service that, in response to requests, searches a wide array of databases and generates a profile of the subject of the search. Spokeo dealt with the standing of an individual, Thomas Robins, to sue for violation of the Fair Credit Reporting Act of 1970 based on allegations that his Spokeo-generated online profile contained inaccurate information and that such inaccurate reporting of information violated the FCRA. Robins sought class-action certification for his suit.
Robins brought suit under provisions of the FCRA that provides for a civil claim against any person who “willfully fails to comply with any requirement” of the FCRA. Robins alleged Spokeo was a consumer reporting agency and that its profile of him contained inaccurate information including his age, marital status, employment status, and income. The matter was originally dismissed by the district court, which found Robins had not pled an “injury in fact” as required to assert standing. The Ninth Circuit reversed, holding Robins’ injury allegation was sufficiently particularized because he had alleged his individual statutory rights had been violated. In so ruling, the Ninth Circuit noted that violations of statutory rights are “usually” a sufficient injury in fact to confer standing.
The Supreme Court disagreed. It noted that standing under Article III of the Constitution requires that an injury must be both particularized and concrete. In this case, while the Ninth Circuit addressed whether the alleged injury was particularized, it did not address whether it was concrete. A concrete injury must actually exist, and must be real, not abstract.
At issue was whether a violation of a statutory right, standing alone, constituted actual harm even when a plaintiff did not sustain any tangible harm. The Court held that a concrete injury is required for standing to exist even in the context of a violation a statutory violation.
The Court, however, left, unclear what exactly constitutes actual harm in cases where causes of action are based on statutory violations. It noted that concrete harms can also be intangible, i.e. in cases involving free speech or the free exercise of religion. Also, the risk of harm can constitute a concrete harm. In other cases, a violation of a right granted by statute can be sufficient to constitute an injury in fact, noting that a plaintiff in such cases “need not alleged any additional harm beyond the one Congress has identified.”
Applying these general principals to Robins’ claim, the Court noted that on the one hand, Congress, in enacting the FCRA, sought to curb dissemination of false information. On the other, however, Robins could not demonstrate standing by alleging a “bare procedural violation,” noting for example, that while reporting of an incorrect zip code may be a procedural violation; such an inaccuracy causes no actual harm or material risk of harm. Because the Ninth Circuit did not address the issue of whether the injury was concrete, the Court remanded the case back to the Ninth Circuit for further proceedings.
Because the Court largely left the issue of which statutory violations constitute an injury in fact, open further litigation on this issue will continue to take place in cases where statutory violations can give rise to private causes of action. Additionally, because of the Court’s holding that a bare procedural violation may result in no harm, class action certification may become more difficult in the wake of Spokeo. In a footnote, the Court noted “[t]hat a suit may be a class action…adds nothing to the question of standing, for even plaintiffs who represent a class ‘must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong.’” Another area where the Spokeo decision may have a significant impact is in data breach litigation, where no actual harm may exist at the time a suit is filed and where the injury claimed is a risk of future harm.
While the full impact of the decision remains unclear, the requirement that a plaintiff demonstrate a sufficient injury in fact to allege standing remains alive and well and defendants should continue to scrutinize complaints, especially those based on statutory violations, to determine whether a plaintiff’s claim is based on something more than a technical or procedural statutory violation.
Blogger: John D. “Jack” Hoblitzell
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jdhoblitzell@kaycasto.com
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