In the second periodic installment of the Employment Law Lookout Blog Team’s analysis of employment law (and related) case being heard by the United States Supreme Court this term, read on for our take on Spokeo Inv. v. Robins.

Plaintiffs Without Injuries?  SCOTUS To Hear Arguments Whether Plaintiffs Need to Show Concrete Harm To Establish Injury-in-Fact for Article III Standing

On April 27, 2015, the U.S. Supreme Court granted cert in Spokeo, Inc. v. Robins, a case brought under the Fair Credit Reporting Act (“FCRA”) where the Ninth Circuit held that the “violation of a statutory right is usually a sufficient injury in fact to confer standing” and that “a plaintiff can suffer a violation of the statutory right without suffering actual damages.”

The plaintiff, Thomas Robins, filed a putative class action against Spokeo, Inc., which is an online people search platform that organizes information about people into comprehensive profiles. Robins sued the company for allegedly violating the FCRA by presenting inaccurate information about him on the Internet—he accused the company of over-reporting his earnings and education level, and reporting that he was married with children, even though he was not married and had no children.  He argued this information might have a negative impact on his employment prospects, but did not allege any actual harm.  With no actual damages, Robins sued to recover only statutory damages.  In the Ninth Circuit’s view, that was enough for to confer standing under Article III.

The question that the Supreme Court took up: Does a plaintiff who suffers no concrete harm, but who instead alleges only a statutory violation, have standing under Article III to bring a claim on behalf of himself or a class of individuals?

Leading Up To Spokeo.  This case follows in the footsteps of the Supreme Court’s 2013 decision in Clapper v. Amnesty Int’l USA, where a group of attorneys and human rights, labor, legal, and media organizations sued seeking a permanent injunction to stop surveillance permitted by the FISA Amendments Act of 2008.  In the 5-4 decision, Justice Alito wrote that under Article III, threatened injury must be at least “certainly impending.”  Possible future injuries were not enough.  ButClapper left the question of actual harm open… until now.

The Circuits.  The Circuits are split.  For example, the Ninth Circuit, in Spokeo, found actual harm was not needed if a plaintiff could point to a violation of a statutory right.  This comported with the Sixth Circuit’s view (Beaudry v. TeleCheck Services, Inc.), and the Fifth and Seventh have also shown their support (Mabary v. Home Town Bank and Remijas v. Neiman Marcus Group, LLC, respectively).  The Second, Third, and Fourth Circuits have generally disagreed:Kendall v. Employees Retirement Plan of Avon Prods. (2d Cir.); Doe v. National Board of Medical Examiners (3d Cir.); David v. Alphin (4th Cir.).

Why This Case Matters.  The Supreme Court’s decision may have a significant impact on congressional power as well as the future of consumer, workplace, and other class actions.  The question formally presented is rooted in separation of powers issues between Congress and the federal judiciary, in that it may limit Congress’ ability to create a statutory right of action without a requirement of actual harm in order to recover.  However, the Court may opt to narrow the question to:  Can plaintiffs sue for the violation of a statute when they can show no actual injury or harm that they have suffered?

The Court’s answer in the negative could discourage the current wave of consumer, workplace, and other class actions seeking millions in statutory damages. On the other hand, a decision allowing individual and class claims to go forward alleging only statutory damages without injury in fact would likely have the opposite outcome, resulting in claims based on alleged violations of statutory requirements, brought by individuals who suffered no adverse consequence of the identified possible violation.