MILWAUKEE (Legal Newsline) – A recent U.S. Supreme Court decision limiting a consumer’s ability to sue a company’s mishandling of personal information is protecting companies like Time Warner from class action lawsuits.
The case, Spokeo v. Robins, was brought forward by a plaintiff who complained Spokeo, a search engine company that specializes in providing personal information, had provided wildly inaccurate information about him that had affected his ability to find work.
The decision said that plaintiff Robins didn’t have standing to bring a suit under the Fair Credit Reporting Act because he hadn’t proved actual damages.
“This decision makes clear that bare statutory violations of certain statutes will not confer standing on individual plaintiffs," said Elizabeth Haas, a partner and litigation attorney specializing in complex commercial litigation, including class action defense work, with the law firm Foley and Lardner.
“Plaintiffs will need to allege some type of concrete harm, beyond the statutory violation, to bring a viable suit."
Haas said the decision already has been used in Wisconsin.
“In Gubala v. Time Warner Cable Inc., U.S. District Judge Pamela Pepper dismissed a putative class action accusing Time Warner of retaining subscribers’ personal identification information after they ended their service, ruling the former customer who brought the suit lacked standing under Spokeo,” she said.
In granting Time Warner’s motion to dismiss, the court explained that the plaintiff, who accused the data of not adequately protecting personal data, didn’t show damage because the information collected by the company was correct and hadn’t been shared with a third party.
“Likewise, in August of this year,” Haas said, “Judge Pepper again relied on Spokeo and dismissed another proposed class action against Time Warner for conducting credit checks on job applicants in Groshek v. Time Warner Cable Inc.”
“The court found that Spokeo called for a showing of real harm, and Groshek’s suit did not clear that hurdle,” she said.
Haas said the “standing principles” in Spokeo had also been used in Wisconsin courts to find standing for plaintiffs in an action regarding Wisconsin’s newly enacted voter identification law, and it could lead to changes in the class action certification process in that proving concrete harm may require the inquiry of each class member.
She said the decision means companies won’t have to face a lawsuit every time incorrect information is collected.
“This is important to corporations defending against these types of lawsuits, as they may be able to achieve dismissal of putative class actions at the outset of the case when a specific injury is not alleged,” she said.
“Class action defense can be an expensive and burdensome undertaking so early dismissal of these types of actions can significantly reduce that expense and limit a defendant’s’ exposure to damages.”
Haas said Spokeo doesn’t prevent plaintiffs from collecting damages, but only when those damages can be proven.
“Where plaintiffs allege that their personal information has been improperly disclosed, they may need to go one step further to allege and prove that their information was actually misused and how this harmed them,” she said. “The mere fact of disclosure may not be enough to show a concrete injury for standing purposes."