The U.S. Supreme Court heard oral argument in Spokeo v. Robins, a case based on alleged violations of the Fair Credit Reporting Act that has major implications for consumer class actions and privacy lawsuits.

Thomas Robins sued Spokeo for allegedly publishing incorrect information that he was married with children and in his 50s, when he was actually unmarried, childless, and in his 20s. Robins claimed this information had a negative impact on his job prospects. He alleged violations of the FCRA, which provides for statutory damages ranging from $100 to $1,000.

A district court judge dismissed the suit for lack of standing, finding that Robins failed to state an actual injury. The Ninth Circuit Court of Appeals reversed. The U.S. Supreme Court granted certiorari on the question of "[w]hether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute."

Not surprisingly, the Court appeared divided during oral argument. While the more liberal end of the bench advocated for a broad interpretation of standing under the federal statute, the more conservative justices appeared to favor limiting the availability of such lawsuits based on a showing of actual injury.

When discussing the question of injury, Justice Elena Kagan said the fact pattern "seems like a concrete injury to me," as Spokeo got "everything" wrong about him and "basically portrayed a different person." "If somebody did that to me, I'd feel harmed," she added. "And I think that if you went out on the street and you did a survey, most people would feel harmed."

Justice Sonia Sotomayor agreed. "I will tell you that I know plenty of single people who look at whether someone who's proposed to date is married or not," she said. "So if you're not married and there's a report out there saying you are, that's a potential injury."

On the other end of the spectrum, Justice Samuel Alito described any harm to Robins as "speculative," particularly as the record does not include evidence that anyone ever actually conducted a search for him on Spokeo. "Is there anything here to indicate that anybody other than Mr. Robins ever did a search for him?" he asked. Robins' lawyer replied in the negative, leading Justice Alito to wonder, "Then isn't that quintessential speculative harm?"

Taking a similar line, Chief Justice John Roberts noted that precedent doesn't support Robins' position. "We have a legion of cases that say you have to have actual injury," he said.

To read the transcript of the oral argument in Spokeo v. Robins, click here.

Why it matters: The outcome of the Spokeo case could have a potentially wide-ranging impact on consumer class actions, particularly privacy litigation. Multiple federal statutes—including the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, and the Video Privacy Protection Act, among many others—currently allow plaintiffs to file suit based on a statutory violation without the showing of an actual injury. According to amicus briefs filed by major tech companies, affirming the Ninth Circuit decision would push the courthouse doors open wide to plaintiffs seeking to hold companies liable for technical violations of federal law even where injury did not occur. Alternatively, a reversal to hold that plaintiffs must establish an actual injury would provide a modicum of protection for companies facing multimillion-dollar class actions. A decision from the Court is expected later this term.