The Supreme Court has granted certiorari in Spokeo Inc. v. Robins, No. 13-1339 (U.S. Apr. 27, 2015), a case that presents an important question which could have a significant impact on consumer class actions. The Court will address whether Congress can confer Article III standing on a plaintiff who suffers no concrete harm, by authorizing a private right of action based on a bare violation of a federal statute. In granting certiorari, the Supreme Court rejected the Solicitor General’s recommendation to either deny certiorari or to narrowly focus on the specifically alleged injury and statute at issue in the case.
Petitioner Spokeo, Inc. operates Spokeo.com, a people search engine which aggregates publicly available information from phone books, social networks, marketing surveys, real estate listings, business websites and other sources. Respondent Thomas Robins instituted a putative class action against Spokeo, alleging that Spokeo was a “consumer reporting agency” under the Fair Credit Reporting Act (FCRA) that was disseminating inaccurate personal information in its “consumer reports.”
Judge Otis D. Wright, II, of the Central District of California dismissed the suit, holding that plaintiff failed to allege an injury or actual harm. Judge Wright stated that allegations of possible future injury fail to satisfy Article III standing requirements. The Ninth Circuit reversed, finding that the alleged violations of FCRA sufficiently satisfied Article III’s injury-in-fact requirement and noting in its order that “the violation of a statutory right is usually a sufficient injury to fact to confer standing.”
The question of Congressional power with regard to Article III standing has been brewing. As noted in the Petition for Certiorari, the Court had the opportunity to address this issue in First American Financial Corp. v. Edwards, No. 10-708, but dismissed the writ as improvidently granted in 2012. In First American, the question before the Court was whether lawsuits under the Real Estate Settlement Procedures Act, which allows homebuyers to sue banks and title companies when they pay kickbacks for the closing of a mortgage loan, are constitutional if the kickback does not affect the price or quality of the services provided. The Ninth Circuit had rejected First American’s argument that the plaintiff suffered no discernible injury from the alleged illegal kickback because the rates charged were set by state law and she did not show the quality of the services had been reduced as a result of the kickback.
The decision in Spokeo could have broad implications on the viability of consumer class actions seeking millions in statutory damages and attorney fees. This case is set to be heard in the Court’s October term.