Still no word from the Supreme Court in what is the most important privacy class action and consumer case of the decade, Robins v. Spokeo Inc.

The key issue in Robins is whether Article III standing can be conferred when plaintiff suffers no injury but can recover statutory imposed penalties.  Article III of the U.S.  Constitution requires that a plaintiff suffer an injury in fact –injury or damage that is concrete and which the law recognizes.

The Supreme Court is now pondering whether to accept cert in this case that was originally decided by the 9th Circuit in February 2014. Not surprisingly, the 9thCircuit determined that such statutory penalties were sufficient without injury or damage to provide standing, joining the 6th, 10th and D.C Circuits. The 2nd and 4th Circuits have found directly to the contrary. 

In Robins, the Act in question, the Fair Credit Reporting Act, imposed penalties collectible by affected consumers of not less than $100 or more than $1000 per violation for publishing inaccurate personal information.  Spokeo operated a website that provided users with information about individuals.  Unfortunately, it published inaccurate information about Mr. Robins who brought suit on his own behalf and on behalf of a class of allegedly similarly situated individuals.

The importance of the decision facing the Supreme Court cannot be overstated. Most privacy related statutes contain monetary penalties recoverable by affected consumers or users; it is the compounding effect of such penalties across a class of individuals that have the plaintiffs’ class action bar salivating. The Telephone Consumer Protection Act (TCPA,) the Video Privacy Protection Act, (VPPA), the Stored Communications Act, the Electronic Communications Privacy Act (ECPA) (not to mention a whole slew of more traditional consumer protection acts) are just a few of such statutes.

Based on this “no injury” concept sustained by the 9th, 6th, 10th and D.C. Circuits, plaintiffs’’ attorneys have and are bringing class actions that net millions of dollars in settlements due to the enormous exposure presented by these claims.   For example, Netflex recently faced class claims in the billions of dollars and Google in the trillions. Facebook was presented with claims of a class composed of over 3.6 million people whose statutory claims each ranged from $2500 to $10,000 PER VIOLATION.          

The settlements of class claims brought under the TCPA are legendary: Capitol One paid $75 million, Bank of America $32 million, Jiffy Lube $47 million  and the list grows longer each month. The in terrorem effect of such claims makes settlement the only viable option. And yet often the only real injury is irritation and disclosure of facts that really make little difference to anyone.

Perhaps sensing the importance of the question, the Supreme Court in October of last year asked the Solicitor General to weigh in after the filing of multiple amicus briefs from businesses and the technology industry.  There is no deadline for the Solicitor General’s office to provide its input.

Whether this trend and practice will continue hinges almost entirely on what the Supreme Court decides. If it does not accept cert., then these cases will proliferate perhaps at an alarming rate as new and novel arguments will be made to fir new technology into statutes that were designed to prohibit other harms.  (The VPPA for example was an outgrowth of a successful effort to obtain and then publish a list of videos rented by a Supreme Court nominee. Now it’s being applied to streaming over the internet).  If the Court accepts cert and overturns Robins, then an entire practice area will vanish over night. If it sustains the Ninth Circuit’s view then Robins becomes the law of the land. Either way privacy and class action practitioners face perhaps the most significant disruptive event in their careers.