On April 27, 2015, the U.S. Supreme Court granted certiorari in Spokeo Inc. v. Robins, Case Number 13-1339. The issue raised by the certiorari petition was whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm by authorizing a private right of action based on a bare violation of a federal statute.
The federal appellate courts are split on whether a plaintiff must allege actual injury and not just a violation of a federal statute in order to establish Article III standing. Article III of the Constitution mandates that plaintiffs in federal court claim harm in order to sue, but modern financial regulation and privacy issues have challenged this principle.
In Spokeo, the plaintiff claimed that he had suffered an actionable injury because the website provided prospective employers with inaccurate personal information about him and failed to exercise its responsibilities as a consumer reporting agency with fairness. According to plaintiff, the alleged misrepresentations violated the Fair Credit Reporting Act (“FCRA”), the basis of the plaintiff’s class action suit. Spokeo moved to dismiss for lack of standing, and the U.S. District Court for the Central District of California granted the motion. In dismissing the complaint, the district court held that Robins failed to allege an injury or actual harm and explained that allegations of possible future injury do not satisfy Article III standing requirements. On appeal, the U.S. Court of Appeals for the Ninth Circuit reversed, holding that plaintiff’s allegation of willful violations of the FCRA was sufficient to confer Article III standing because, according to the Ninth Circuit, the statutory cause of action does not require a showing of actual harm when the complaint alleges willful violations of the FCRA.
In its petition before the Supreme Court, Spokeo argued that the court should hear the case because the question of Article III jurisdiction has significant implications for class action litigation. In addition to the FCRA, Spokeo’s brief cited numerous other federal laws that include both private rights of action and statutory damages, including the Telephone Consumer Protection Act, Truth in Lending Act, Fair Debt Collection Practices Act and Electronic Funds Transfer Act. A decision in this case would also resolve similar issues presented under those federal statutes.
The Supreme Court’s resolution of this issue is likely to have a significant impact on the future viability of data breach and other privacy-related consumer class action cases, in which the complaints typically do not allege any actual harm. The text of the Ninth Circuit decision is available here.