On February 4, the Ninth Circuit ruled that a plaintiff need not show actual harm to have standing to sue under the Fair Credit Reporting Act (FCRA); a violation of the statutory right is a sufficient injury in fact to confer standing. The case, Robins v. Spokeo, Inc., may open the door for plaintiffs to get past the motion to dismiss stage in FCRA cases, as well as potentially in other cases that involve violations of statutory rights.
Here, the plaintiff alleged that Spokeo posted inaccurate credit-related information on its website in a willful violation of the FCRA. After his original complaint was dismissed by the Central District of California for failure to allege actual or imminent harm, the plaintiff amended his complaint to include an allegation that Spokeo’s posting of false information caused harm to his prospects for employment, and caused him anxiety and stress about his lack of employment prospects. The district court denied Spokeo’s motion to dismiss the amended complaint, but reconsidered its ruling after Spokeo moved to certify an interlocutory appeal. Upon reconsideration, the district court dismissed Robins’ complaint because Robins lacked Article III standing.
In reversing the district court’s ruling, the Ninth Circuit found that the FCRA cause of action does not require a showing of actual harm when the suit alleges a willful violation. The court agreed with a 2009 Sixth Circuit case,Beaudry v. Telecheck Services, Inc., that violations of statutory rights created by FCRA are the kind of de facto injuries that Congress can elevate to legally cognizable injuries. The court found that Robins satisfied the two constitutional limitations on congressional power to confer standing – he alleged that Spokeo violated his specific statutory rights, not just the rights of other people, and his personal interests in handling his credit information were individualized rather than collective. By surviving the motion to dismiss, Robins can now focus on the merits of his claim.
Many class actions arising from the loss or theft of financial information are pleaded under the FCRA, even where the status of the defendant as a consumer reporting agency is far from clear. In addition, though the Robins v. Spokeo case – and the Beaudry case it cites – are specific to the FCRA, the decision could potentially implicate standing arguments in cases alleging other statutory violations.