By Joe Patry
The United States Supreme Court’s decision in Spokeo v. Robbins re-emphasized the Constitutional requirement that a plaintiff must show a particularized and concrete injury to show standing to sue in federal court. In remanding a Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq. complaint to the Ninth Circuit, the Supreme Court found that the lower court failed to sufficiently analyze both requirements. This decision was widely anticipated to potentially cause a sea change in complaints based on violations of federal consumer statutes. Some had feared that this decision would potentially eliminate lawsuits based on statutory violations where the consumer suffers no actual damages. However, the decision merely requires the lower court to more fully analyze whether the consumer sufficiently alleged a concrete and actual injury.
In Spokeo, a six justice majority of the Supreme Court[1] examined whether a consumer had standing to bring a claim under the FCRA. Spokeo operates a “people search engine,” which allows visitors to the site to input a person’s name, phone number or email address, and then provides information about the subject of the search. See Spokeo at 1.[2] Mr. Thomas Robins learned that some of the information which Spokeo had on file for him was incorrect. Specifically, Spokeo states that he is married, has children, is in his 50s, has a job, is relatively affluent, and holds a graduate degree. Id. at 4. According to Mr. Robins, all of that information is incorrect. Id.
Mr. Robins filed sued in the United States District Court for the Central District of California and alleged that Spokeo had violated a provision of the FCRA which requires companies that provide consumer information to follow reasonable procedures to ensure that the information is accurate. Id. at 3. This particular provision of the FCRA allows actual damages or statutory damages of $1,000 per violation. Id. The trial court found that Mr. Robins did not have standing to bring his claim because he had not pled an injury in fact, which is required, as federal courts may decide only actual cases or controversies under Article III of the United States Constitution. Id. at 6. The Ninth Circuit reversed the dismissal, and found that the statutory violation was in and of itself sufficient to confer standing. Id. at 5. Spokeo appealed to the Supreme Court.
The Supreme Court began by briefly discussing the concept of standing, noting that the doctrine of standing developed to ensure that federal courts do not exceed their authority. Id. at 6. Further, the Supreme Court recited the three elements for plaintiff to have standing in federal court: (1) an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be addressed by a favorable judicial decision. Id. To survive a motion to dismiss, a complaint must allege facts to support each element. Id.
Focusing on the injury in fact requirement, the Supreme Court highlighted that plaintiff must have suffered “an invasion of a legally protected interest,” which is “concrete and particularized, and “actual or imminent, not conjectural or hypothetical.” Id. at 7 (internal citations omitted). To be particularized, an injury must affect the plaintiff in a personal way. Id. However, an injury must also be concrete. Id. at 8.
In remanding, the Supreme Court found that the Ninth Circuit had not sufficiently analyzed whether Mr. Robins’ injury caused by the alleged FCRA violation was concrete and actually existed. Id. Although Congress can create statutory violations for intangible harms, Article III still requires a concrete injury in the context of a statutory violation. Id. It is not enough for a plaintiff to allege solely that a statute has been violated. Id. at 10. For example, a provision of the FCRA requires the credit reporting agencies to inform consumers when it has provided information to third parties such as Spokeo. Id. at 10-11. There may be no statutory violation if the credit reporting agency fails to provide the notice to the consumer but the information provided to Spokeo or other third parties was accurate. Id. Or, there may be no harm from even incorrect information – i.e., if an incorrect zip code was provided, the Court found that a consumer could not possibly suffer any harm from this harmless incorrect information. Id.
Ultimately, depending on what happens on remand, this issue may be back before the Supreme Court. Depending on the Ninth Circuit’s decision on remand, the Supreme Court may again have the opportunity to issue an opinion that significantly impacts consumers’ ability to sue for statutory violations for which they have no actual damages. However, Spokeo was not the potential sea change that some had predicted.
[1] Justice Alito wrote the opinion, joined by Chief Justice Roberts, and Justices Kennedy, Thomas and Breyer. Justice Thomas concurred and Justices Ginsburg and Sotomayor dissented.
[2] All references to pages are to as the opinion is paginated in the version available on the Supreme Court’s website.