Jessica Karmasek May 17, 2016, 2:16pm


WASHINGTON (Legal Newsline) - The U.S. Supreme Court ruled Monday that a class action lawsuit filed against a popular people search engine can continue, but only if a federal appeals court finds that inaccurate personal information published on the website caused plaintiffs concrete harm.

The nation’s highest court ruled 6-2 that the U.S. Court of Appeals for the Ninth Circuit failed to consider both aspects of the injury-in-fact requirement, making its standing analysis “incomplete.”

The majority agreed that the case, Spokeo v. Robins, should be remanded to the Ninth Circuit.

“It did not address the question framed by our discussion, namely, whether the particular procedural violations alleged in this case entail a degree of risk sufficient to meet the concreteness requirement,” Justice Samuel Alito wrote for the majority, including Chief Justice John Roberts and justices Anthony Kennedy, Clarence Thomas, Stephen Breyer and Elena Kagan. Justice Ruth Bader Ginsburg filed a dissent, with Justice Sonia Sotomayor joining.

“We take no position as to whether the Ninth Circuit’s ultimate conclusion -- that Robins adequately alleged an injury in fact -- was correct,” the majority added.

At issue in Spokeo is whether a person may bring a lawsuit when a company violates a federal privacy law.

In order to invoke the jurisdiction of federal courts under Article III, a plaintiff must have “standing,” or a legal right, to sue.

The petitioner, Spokeo, argued the Supreme Court should dismiss the case because the plaintiff, Thomas Robins of Virginia, did not prove that the publication of inaccurate personal information in violation of the Fair Credit Reporting Act was a “concrete injury” under Article III.

Spokeo discloses to the public personally identifiable information, including contact information, marital status, age, occupation and economic health. Some of this information is subject to protection under federal privacy laws.

Robins sued Spokeo for willful violations of the FCRA, charging that the website disclosed inaccurate information about him that harmed his employment prospects and violated his rights under the federal law.

Spokeo sought to dismiss the case, claiming there was no “injury-in-fact.”

The U.S. District Court for the Central District of California initially denied Spokeo’s motion to dismiss for lack of jurisdiction, but later reconsidered and dismissed the complaint with prejudice. The court found that Robins had not “properly pled” an injury in fact, as required by Article III.

The Ninth Circuit reversed, explaining that Congress’ “creation of a private cause of action to enforce a statutory provision implies that Congress intended the enforceable provision to create a statutory right.”

The Supreme Court’s ruling is a win, albeit a narrow one, for Spokeo. The Ninth Circuit could once again side with Robins, and the case could end up before the high court once more.

But the search engine seems confident it will prevail.

“With its opinion in the Spokeo v. Robins case, the Supreme Court has squarely rejected the contention that merely alleging a violation of a statute alone gives a plaintiff standing to bring a claim under federal law on behalf of a class of hundreds of thousands or millions of people,” the company said in a statement. “The Court reaffirmed that each member of a proposed plaintiff class has to prove ‘a concrete injury’ and said that ‘concrete’ means ‘real and not abstract.’”

It continued, “The Court has asked the Ninth Circuit Court of Appeals to address whether Mr. Robins has met that requirement of ‘real’ harm. Spokeo believes he has not, but even if he has, the Court’s standard will make it much harder to turn individual cases like this one into million-member class actions.

“Spokeo looks forward to the chance to continue advocating against no-injury class action lawsuits that threaten American businesses and the overall economy.”

As the Supreme Court explains in its 11-page opinion, a plaintiff, to establish injury in fact, must show that he or she suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.”

“Particularization is necessary to establish injury in fact, but it is not sufficient. An injury in fact must also be ‘concrete,’” Alito noted in the majority ruling. “Under the Ninth Circuit’s analysis, however, that independent requirement was elided.

“First, the court noted that Robins ‘alleges that Spokeo violated his statutory rights, not just the statutory rights of other people.’ Second, the court wrote that ‘Robins’s personal interests in the handling of his credit information are individualized rather than collective.’ Both of these observations concern particularization, not concreteness.

“We have made it clear time and time again that an injury in fact must be both concrete and particularized.”

As the majority pointed out, “concrete” is not necessarily synonymous with “tangible.”

“Although tangible injuries are perhaps easier to recognize, we have confirmed in many of our previous cases that intangible injuries can nevertheless be concrete,” Alito wrote.

“Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. Article III standing requires a concrete injury even in the context of a statutory violation.”

This does not mean, however, that the risk of real harm cannot satisfy the requirement of concreteness, Alito continued.

“In the context of this particular case, these general principles tell us two things: On the one hand, Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk. On the other hand, Robins cannot satisfy the demands of Article III by alleging a bare procedural violation,” he wrote for the majority.

“A violation of one of the FCRA’s procedural requirements may result in no harm. For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency’s consumer information, that information regardless may be entirely accurate.

“In addition, not all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.”

Jason Johnston, a law professor at the University of Virginia who teaches courses on contracts, economic regulation and torts, among others, said the high court’s ruling is “clever” and, overall, has the potential to be a good decision.

“I think what the Supreme Court did here might improve matters,” he explained. “It might keep out of courts those bad cases where there’s really no harm alleged.”

Still, Johnston said he expects “quite a bit” of litigation to be brought over the issue.

“I think it’ll be really interesting to see how this shakes out in the federal courts,” he said. “It’s really going to depend on how the federal (district) courts and the 11 federal courts of appeal interpret this.”

Johnston said it was very unlikely that a majority of justices would issue a ruling that plaintiffs like Robins only have to allege a violation of a right created by a statute, without any need to show a concrete harm from the violation.

Such no-harm cases “do no social good” and serve only to enrich class counsel, he argues.

Jonathan Taylor of Washington, D.C., firm Gupta Wessler PLLC, which helped represent the plaintiffs in the Supreme Court case, said corporations had hoped the court would issue a broad ruling that could be used to defeat class actions in “a wide swath of cases.”

Instead, the court rejected that request and issued a very narrow opinion that breaks no new ground, he said.

“If anything, the Court’s opinion in Spokeo only reaffirms Congress’ basic authority to protect people from injuries that are often difficult to measure -- like the invasion of privacy, or the failure to receive potentially important information -- by granting them the right to bring suit when they suffer those injuries,” Taylor said.

“The decision is unlikely to have a large effect going forward.”

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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