The Decision

On Tuesday May 17, 2016, in a highly-anticipated decision, the Supreme Court (6-2) vacated and remanded a Ninth Circuit decision with major standing implications.  The Court held that Article III standing requires a concrete injury even in the context of a statutory violation.  Specifically, the Court held that for Article III standing, “[t]he plaintiff must have (1) suffered an injury in fact; (2) that is fairly traceable to the challenged conduct of the defendant; and (3) that is likely to be redressed by a favorable judicial decision.”  The Court further clarified that “[t]o establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.”  In other words, a “bare procedural” statutory violation will not confer standing. 

The Background

The Spokeo Plaintiff (Robins) alleged that Spokeo (a website operator) willfully violated the Fair Credit Reporting Act (“FCRA”) by publishing inaccurate information. The district court dismissed the action, holding that Robins lacked standing.  The Ninth Circuit reversed holding that Robins had standing because “Spokeo violated his statutory rights, not just the statutory rights of [others].”  The Ninth Circuit determined that violations of statutory rights are “concrete, de facto injuries.”

After granting certiorari, the Supreme Court vacated the decision, reasoning that the Ninth Circuit’s analysis was incomplete.  The Court held that a plaintiff cannot meet the injuy-in-fact requirement of Article III by alleging a “bare procedural” statutory violation divorced from any concrete harm.  The Court, however, did not go as far as to hold that a “risk of real harm” can never satisfy the requirement of concreteness.  To the contrary, the Court acknowledged that “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact,” and stated that “a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.”

The Take Away

While the Spokeo decision does not bar filing of claims under federal statutes with statutory damage provisions, it certainly may discourage class action filings for technical violations of statutes such as FCRA, Fair Debt Collection Practices Act, Telephone Consumer Protection Act, Real Estate Settlement Procedures Act and others that resulted in no actual harm.