Supreme Court’s Spokeo Decision Leaves Questions Unresolved

Insurance   |   Consumer Finance   |   Technology   |   Telecommunications   |   May 17, 2016

Spokeo v. Robins

On May 16, 2016, the Supreme Court issued its decision in Spokeo v. Robins. This had been a closely watched case, as it had the potential to substantially limit federal court jurisdiction in cases where plaintiffs sued for violations of federal statutes and only sought statutory damages.

The Court’s 6-2 decision turned out to be fairly narrow. This was a suit for publishing false information under the Fair Credit Reporting Act, but the false information in the case of the lead plaintiff was simply inaccurate, not unfavorable. 

  • The Ninth Circuit held that the technical violation was enough to give plaintiff standing. The Supreme Court reversed, holding that it is not sufficient to allege a bare technical violation of a federal statute in order to establish standing. On this point, in fact, all eight justices were generally in agreement. 
  • The crux of the decision, however, turns on a more discrete discussion of the appropriate standard to review a plaintiff’s allegations of their claimed injuries. 
  • And the decision was written in such a way that it does not resolve many of the questions that possibly could have been answered through this case. 
  • Both consumer groups and industry groups are saying favorable things about this decision. We will see who is right.

The defendant, Spokeo, operated a “people search engine.” Some of the information in its search results about the plaintiff was incorrect, including his age, income, marital status, and likeness. The plaintiff filed a class action against Spokeo alleging violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681 (FCRA). The FCRA provides that a plaintiff may recover either actual damages or statutory damages of $100 to $1,000 per violation. The district court dismissed the claims for lack of standing because the plaintiff had suffered no actual damages, but the Ninth Circuit reversed, stating that a violation of a statutory right is sufficient injury-in-fact to confer standing. In other words, the plaintiff had alleged a violation of his own statutory rights, not just the statutory rights of absent class members.

Justice Alito, writing for the majority, reversed this decision, holding that the Ninth Circuit’s standing analysis was “incomplete” because it focused only on the particularized nature of the injury-in-fact requirement for constitutional standing, but did not address the concreteness requirement. For an injury to be particularized, it must affect the plaintiff in a personal and individual way. Justice Alito held that the complaint satisfied this requirement.

The injury also must be concrete, which is to say, it “must actually exist.” Moreover, according to the Court, Congress can identify and elevate intangible harms to the level of concrete injury in certain circumstances. When it enacted the FCRA, Congress sought to curb the dissemination of false information by adopting procedures designed to decrease that risk. On the other hand, the plaintiff could not satisfy the concreteness requirement by alleging a “bare procedural violation.” Not all inaccuracies in information cause harm. The Court declined to address these issues further, however, because the Ninth Circuit failed to address the concreteness requirement of Article III standing. The Court instead remanded for further consideration based on the broad principles it outlined.

Justice Ginsburg’s dissent, in which she was joined by Justice Sotomayor, posited that the plaintiff had indeed alleged enough about concreteness to carry himself across the threshold on this point.

As evidenced by the favorable reaction from both consumer groups and industry groups, it is not clear who will end up benefitting most from today’s opinion. In Spokeo, the Court had an opportunity to issue a more far-reaching decision affecting not only FCRA suits, but other claims premised on statutory violations. Similarly, many Court watchers believed a far-reaching opinion – in either direction – would have significant implications in the realm of data breach litigation and plaintiffs’ ability in such litigation to pursue claims where the only injury alleged is a fear of future harm. Without clear direction from the Court on these issues, litigants and lower courts will continue to work their way through them.

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